Study rips state for higher tuition, lack of support for higher ed

Michael Hansen is president of the Michigan Community College Association. Dan Hurley leads the Michigan Association of State Universities

First, the bad news: Michigan is underfunding its public universities relative to other Midwestern states, leading to students paying higher tuition and taking on more debt than their equivalents in Indiana or Ohio. So says the Michigan League for Public Policy, a progressive-leaning advocacy group in Lansing.

Adjusted for inflation, Michigan’s public-university tuition has increased by 100-150 percent since 2003 and today stands as sixth-highest tuition in the country, writes Peter Ruark, senior policy analyst, in the League’s report, released today.

The findings are the latest shot across the bow in a debate that extends beyond Michigan: Whether budget-minded, conservative legislatures in state capitals like Lansing are to blame for rising tuition (and student debt) at public universities, or are universities also at fault for bloated administrative expenses that contribute to higher tabs for students and their families?

According to the Michigan League, state tuition increases can be directly traced to declining state support. At the turn of the century, students paid around 40 percent of schools’ operating costs, but today, that figure stands around 70 percent in the state, the report states.

Consequently, not only do students pay more, they graduate with more indebtedness. Sixty-two percent of Michigan four-year college students graduate with debt, which averages $29,450. And low-income students in the state who qualify for Pell grants, the federal subsidy for higher-ed costs, find these grants cover a much smaller proportion than they once did. In 2003, the MLPP report said, the average Pell grant covered 40 percent of tuition at the University of Michigan-Ann Arbor and 66 percent at Saginaw Valley State. But by last year, the figure was below 40 percent at every public university in Michigan and less than 30 percent at U-M-Ann Arbor, Michigan State University and Michigan Technological University.

“Michigan needs to care about this,” Ruark told Bridge in an interview. “Post-secondary education is such an important part of workforce development. We can’t let college education be just an option for the privileged. It needs to be accessible to all economic levels.”

Are you ready for the good news yet? Michigan’s 28 community colleges, the two-year institutions that provide job training, certification and associate degrees, as well as a place to earn low-cost, transferrable college credits for eventual graduation from a four-year school, are a bargain.

While the MLPP report has Michigan’s average four-year public-university tuition at sixth-highest in the nation, its two-year colleges are at 34th, and lowest in the seven-state Midwest region, which besides Michigan includes Illinois, Indiana, Iowa, Ohio, Wisconsin and Minnesota. Students here pay an average of $3,510 a year for community college tuition. That’s above the national average of $3,440, but well below Minnesota ($5,391), Ohio ($4,534) and others.

And given that nearly half of students at these schools are planning to transfer to a four-year school, it indicates a strategy toward making a bachelor’s degree far more affordable, and one that many students are already using.

Michael Hansen, president of the Michigan Community College Association, http://www.mcca.org said the process of navigating from a community college to four-year degree to save money could be made more seamless, a policy objective the MCCA has been working toward.

In 2012, the Legislature made improving the transferability of community college credits a priority, and created a statewide committee to do so. The objective, Hansen said, is to give a “a psychology major who wants a bachelor’s from Michigan State” a clear path to getting there via a low-cost two-year degree that will transfer credits to that major at MSU. It’s the “to that major” part that sometimes trips up transfer students, who might find that fewer credit hours apply than they thought, going in.

“The process needs to be predictable, transparent and efficient,” Hansen said.

In general, community-college enrollment is “hilly,” he said, with trend lines that rise and fall with the economy. When jobs become scarcer and hiring slows, that’s when enrollment rises, as job-seekers or those who want more security in present positions arrive to shore up skills or add credentials. The state’s peak community-college enrollment came in 2012, when the state was about to emerge from the worst recession since the Great Depression, Hansen said. But recovery – as well as a general demographic decline in high-school graduates – has brought a flattening. Michigan’s community colleges are also plagued by high dropout rates.

Why is a two-year school such a bargain in Michigan, relative to their four-year counterparts? It likely has to do with the state’s funding structure, Hansen said, which relies not only on state support and tuition, but also local property taxes, a framework that was set up in the 1963 state constitution. Other states have different funding mechanisms.

Beverly Walker-Griffea, president of Mott Community College in Flint, said in an emailed statement that “the disparity between tuition costs for four year colleges and universities and community colleges in Michigan could prompt more students to start their education at a community college. As people become more aware of the long term financial repercussions of college debt, they are looking for ways to achieve their academic and career goals without mortgaging their future.”

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Back to the bad news

If there’s any more good news to be found, it’s that Michigan is not alone. State support of higher ed has been declining nationwide. The Center of Budget and Policy Priorities reports 46 states are funding their public universities at a lower rate than before the Great Recession, and while some states, including Michigan, are beginning to add back support, it remains below pre-recession levels.

Dan Hurley, CEO of the Michigan Association of State Universities, echoed the MLPP’s analysis.

“(The report) paints a portrait of where Michigan stands,” Hurley said. “It’s helpful in this era of term limits to have a third-party voice to communicate by the numbers what has happened and what the implications are.”

To state residents who see construction cranes erecting new buildings on the state’s college campuses and wonder where the money is coming from if funding is declining, Hurley said that many such projects are privately financed by donors and others; three years ago, real estate developer Stephen M. Ross gave $200 million to his Ann Arbor alma mater, for example, but designated that it be divided between the business school that bears his name and the University of Michigan’s athletic department.

“There’s a very good chance there are not taxpayer or tuition dollars paying for renovations and improvement,” Hurley said. “There is ample, ample evidence at the institutional level that universities have not passed the buck to students” as state funding declines, but have made cuts and found efficiencies in existing administrative frameworks, he added, although tuition increases have been part of the budget-balancing solution.

“I would never deny that tuition is going up, and that’s a direct inverse relationship between state support over many years,” Hurley said.

Members of the state legislature in funding appropriation roles could not be reached to comment on the report Friday, leading into the Labor Day weekend. After Lansing cut higher-ed support by 15 percent in 2011 as part of Gov. Rick Snyder’s first budget, the legislature has slowly increased funding.

In a 2015 education conference sponsored by the Center for Michigan, legislators and others defended state spending levels on higher ed, noting that the state’s universities were competing with many other dire needs as Michigan emerged from recession, including state infrastructure.

And while Michigan college administrators insist they are doing their part to keep costs down, some conservatives look longingly to the example set in Indiana, where former Gov. Mitch Daniels, a Republican who served as President George W. Bush’s budget director, has kept tuition flat for four years at Purdue University, where he now serves as president.

Purdue has also cut the cost of room and board by 5 percent, citing efficiencies in food service. Daniels has offered cash incentives to professors and administrators who can award a four-year degree in three years, and set up corporate partnerships, notably with Amazon, to offer more cost savings that translate to tuition relief.for students.

And in 2017, Purdue will open a STEM charter high school in Indianapolis, designed to be a feeder school to its university sponsor, that will deliver students ready to learn at a higher level and faster pace than they might have in the past.

A worrisome issue for residents

A year ago, the Center for Michigan found the issue of college affordability to be uppermost in state residents’ minds, in “Getting to Work,” a public-engagement campaign on career and workforce issues in Michigan.

Ninety-three percent of the more than 5,000 state residents engaged in community conversations or via polling said they believed post-secondary higher ed was important or very important to prosper in today’s economy, but 55 percent said it was only somewhat or not worth the cost.

Strong majorities identified tuition costs and debt loads as the most concerning issues in the state’s higher-education environment today. And more than half advocated the state boost funding to make college more affordable to students. But nearly as many said schools themselves should also contribute, and large majorities themselves should be more cost-efficient.

In asking for more from the state, they are in accord with the MLPP, which made increasing state support its top policy solution, along with increasing and improving financial aid for all types of students, including older ones retraining between careers. The League also advocated for increased overall support for low-income and non-traditional students, and stricter state oversight of for-profit colleges and training institutes, which generally cost more and graduate fewer students than their public counterparts.

Hurley said that while he recognizes that funding had to be cut during the leanest years earlier in the century, legislators have become “deer in the headlights” over any new revenue generation, i.e. tax increases, and that they need to consider long-term consequences for the state’s transforming economy.

“It’s incumbent upon (lawmakers) to be informed on the incredible return on investment that higher education affords a state,” Hurley said.

Bridge writer Ron French contributed to this report