The Harold Alfond Foundation is giving a $7.5 million challenge grant to the University of Maine System for its new Portland-based graduate center. The system will receive the funding in increments as it raises a matching amount of money and reaches certain benchmarks, officials said.

“This will move our state toward a more prosperous future,” foundation Chairman Greg Powell said before presenting the initial $500,000 check to system Chancellor James Page and the graduate center’s chief executive officer, Eliot Cutler. “Now it’s time to get our plan working for the people of Maine.”

The center was first proposed in 2013, and the Alfond foundation has already provided $2.25 million to study and test the idea.

The center would house the University of Maine School of Law, a new MBA program that replaces separate graduate business programs operating at USM and UMaine in Orono, and the graduate programs in public health and in public policy and management, which now operate at the Muskie School of Public Service at USM. It also would house the Cutler Institute for Health and Policy, which is the research arm of USM and part of the Muskie School on the Portland campus.

“This is a great day for our students and for our institutions,” Page said. “Now we are underway.”

The Graduate School of Business will be led by a new dean who will report to the university system provost. Classes will be offered onsite, and online for students located elsewhere. Degrees will be issued by the University of Maine, and USM’s MBA program will be phased out as the center takes shape, officials said.

Joanne Williams, USM dean of the College of Management and Human Service, said the graduate business faculty there “had to make a difficult decision” to give up the MBA program.

The plans for a graduate center come as graduate program enrollment is falling. Systemwide, graduate student enrollment is down 11 percent over the past five years, from 4,248 students in 2012 to 3,780 students in 2016. At USM, graduate enrollment – which includes the law school – is down 16 percent over five years to a current enrollment of 1,666 students. On its own, law school enrollment has decreased 13 percent over five years, to the current head count of 240 students, and the Muskie School of Public Service enrollment has decreased 17 percent over the same period, to today’s 126 graduate students. UMaine’s graduate enrollment is down 11 percent over five years, to 1,896 students.

Nationwide, graduate school enrollment has been relatively flat since 2010, the tail end of a decade-long surge that saw enrollment increase 36 percent, according to data from the U.S. Department of Education. Federal officials anticipate another, smaller boom, with graduate school enrollment expected to increase by 12 percent from 2015 to 2026.

Cutler and other supporters say the graduate center will boost lagging enrollment by attracting students who want cross-disciplinary opportunities. The center would also include more real-world experiences, including internships and partnerships with business and community leaders.

It also would include more distance learning opportunities, a growing area for graduate enrollment. In 2015, more than one-third of all U.S. graduate students took at least some online courses, with 26 percent exclusively enrolled in distance education courses.

“This is a momentous day. This initiative has the potential to benefit the entire state,” said UMaine President Susan Hunter. “It isn’t easy to be working toward a future that is not in sharp focus. But it is absolutely the right thing to do.”

In November, system trustees authorized Page to ask the Alfond foundation for $10 million: $5 million for the first year of operations, and another $5 million in the second year that would be matched with outside funding. The challenge grant announced Tuesday will ultimately reach the same $15 million goal, although the system will have to raise more matching funds than originally envisioned.

The need for system fundraising comes at the same time that both UMaine in Orono and USM are in the midst of their own capital campaigns.

USM’s $80 million capital campaign focuses on an overhaul of the Portland campus, including a $50 million, 1,000-seat performing arts center, $15 million in athletic facility upgrades and a $15 million endowed “promise” scholarship program for full-time students with financial needs. UMaine’s $200 million capital campaign, of which more than $100 million already has been raised, is primarily for financial support of faculty, students and some capital projects, including an engineering building.

Cutler said the new graduate center would better prepare students for today’s economy, with law students who would become fluent in reading business documents, and business graduates who would be familiar with the law.

“The old economy (in Maine) is not coming back, and the new economy is crippled,” he said, because graduates do not have the full complement of skills for today’s workplace. “The challenge is (that) we need to be more responsive to Maine’s needs, and we’re doing that today.”

Some cross-disciplinary courses are already being offered to law and business graduate students, to test what will work. Cutler said some of the first accomplishments will be to create new executive-training certification programs, and to set up more classrooms in Orono and Portland to accommodate distance learning.

“Reshaping” and “evolving” the existing programs will continue for several years, he said.

“This is new stuff and it’s not easy,” Powell said, acknowledging the work of the various faculty.

According to the business plan, after the initial $15 million is raised, the trustees will be asked to authorize a second round of fundraising to build a $94 million building to house the Maine Center for Graduate Professional Studies. A specific Portland location has not yet been identified, but the center is included as an element in USM expansion plans for the Portland campus.

Financial projections for the center anticipate a total capital investment of $150 million, with over $100 million raised from foundations that invest in education reform. The center will be financially self-sustaining by 2024, according to a business plan.

Noel K. Gallagher can be contacted at 791-6387 or at:

ngallagher@pressherald.com

Twitter: noelinmaine