Attachment II

Background: The Importance of Graduate Education. Graduate education plays a critical role in Ohio's economic development and quality of life. Doctoral education generates research and advanced knowledge that are fundamental to competition in the knowledge economy. Master's education has taken on an increasingly important role in helping both recent college graduates and returning adults respond to the imperatives of an economy that demands ever‑increasing understanding and has become an essential academic credential in many fields. Given the accelerating importance of graduate education. Ohio's public funding model must find ways to be flexible and responsive to a changing marketplace. In order to compete in this market place, Ohio's public universities must provide financial assistance to graduate students. The purpose of the Principles of Good Practice is to establish guidance for public universities in awarding state instructional funds for graduate student financial support.

Funding of Graduate Education. Public universities substantially support graduate education in Ohio through the state's instructional subsidy formula. Overall, this is an efficient and effective mechanism. However, there are some issues of importance to the fair and efficient operation of the formula that cannot be added directly to the matrix of calculations without making the operation of the formula unwieldy or incomprehensible, or both. Accordingly, the public universities and the Board of Regents have agreed to the Principles of Good Practice, described below, as a means of supporting the formula and of ensuring that the anticipated growth in master's enrollment is consistent with the needs of the state and the missions of the public universities.

Funding of Graduate Student Financial Assistance. Graduate student financial assistance in public universities is funded from various sources­ research grants, private endowments, business and industrial funds and a substantial portion from state institutional subsidy.

Principles of Good Practice. The Principles of Good-Practice are those methods agreed to by public universities and the Board of Regents - for offering, awarding and providing state‑supported financial assistance to graduate students. The Principles of Good Practice are not voluntary and have the status of an administrative rule.

Enforcement The Regents will audit compliance and disclose non‑compliance. There are two important caveats to this aspect of disclosure. First, to ensure consistency of application of the Principles of Good Practice, wherever practicable, each public university will publish information regarding its practices for awarding graduate student financial assistance funded with state subsidy. Second, at least in the first few years of the use of the Principles of Good Practice, the Regents will convene consultations in which the public universities will collectively review and interpret practices. This will have the effect of creating an informal "common law", which will guide the decisions of both the public universities and the Regents.

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