Time to Reset Relationship with Michigan's Universities

Time to Reset Relationship with Michigan's Universities
July 11, 2013/Detroit News

by Michael Boulus

As a college degree increasingly becomes the entry point to the knowledge-based economy and the middle class, it’s time for Michigan to reset its relationship with its highly regarded public universities.

Over the last decade, the state has chosen to reduce its investment in higher education — even as more and more students have come to recognize a college degree is vital to their future. Now that the state is seeing an economic rebound, it should consider supporting those students, who are the key to Michigan’s future prosperity, and increase funding for universities. Michigan’s universities have already been making important strides in holding down the cost of providing an education. A recently issued federal report found that when you look at net tuition — tuition minus scholarship aid from 2009-10 to 2010-11 — the net price at Michigan’s public universities dropped by 1.9 percent. Michigan is one of only nine states with a decline.

Increasing “sticker price” tuition at Michigan public universities isn’t a result of wild college spending. The House Fiscal Agency examined the cost of delivering a college degree over the last decade. It found that the annual cost of providing a degree increased only slightly when adjusted for inflation, from $11,624 in 2001-02 to $11,860 in 2012-13. That’s $18/year over the rate of inflation during a period when universities greatly enhanced their research operations, internship programs, placement operations and entrepreneurship programs.

So why is tuition up? That same study showed state support per student has decreased from $6,698 in 2001-02 to $3,583 (in 2012 dollars) last year — a $3,115 cut. To make up the difference, tuition has gone from $4,945 to $8,277 — a $3,332 increase. It’s the failure of the state to support its students that is the primary reason for higher tuition. Michigan’s universities have done their part to control costs, particularly legacy costs. All universities today are on a 401K type retirement program for new employees. Employees are paying 20 percent or more of health care benefits in many cases. Universities were ahead of this curve, taking actions before the state government did to control its legacy expenses.

Michigan universities also have taken the lead in providing scholarship support for students with need. About 40 percent of college students in Michigan graduate with no debt; the vast majority have loans that are less than the cost of a new car. Michigan universities also are leaders in providing online classes and using technology to let students match their schedules to classes they need.

The value of a college degree to the state — its importance as a public good — has never been higher than today. The employment rate in Metro Detroit for those aged 25-64 with a high school degree is 57.8 percent. For those with a bachelor’s degree, it’s 80.6 percent.

A college degree has never been a guarantee of employment, but few without one will enter the middle class in today’s economy.

Our public universities are Michigan’s most important economic development tool. Michigan’s universities are doing their part to hold down costs. Now it’s time for the state to recognize that effort and help students by increasing state support for public universities. College graduates are the vital fuel for a better economy and a return to prosperity for Michigan.

Michael A. Boulus is executive director of the Presidents Council State Universities of Michigan.