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Thursday, June 23, 2016

The Michigan Daily — michigandaily.com NEWS

the reason for the tuition increase.

Regent Denise Ilitch (D) called 

out state officials for this lack of 
prioritization of higher education, 
pointing to how funding on an 
individual basis for prisoners is 
higher than that of students within 
the state.

“The state of Michigan spends 

roughly 25 percent more on prisons 
than on education,” she said. “The 
state of Michigan spends roughly 
$34,000 per prisoner and $11,000 per 
student. I first would like to use my 
public responsibilities to encourage 
Michigan citizens to think about 
the disinvestment our state, our 
governor and our legislature have 
made with respect to the budget in 
not prioritizing education.”

State Rep. Adam Zemke (D–Ann 

Arbor) echoed this sentiment in an 
interview with the Daily, saying 
there has been no increase in the 
importance of higher education in 
his time working for the legislature.

“The increases that have been 

happening are really insignificant,” 
he said. “That is to say the emphasis 
on higher education as a priority in 
my time has not really changed. An 
increase at the rate of inflation is not 
really an increase.”

Despite the clear downward trend 

in state higher education funding, 
the University’s total revenue from 
state funding has decreased by only 
$55 million since 2003, compared to 
an $802 million increase in revenue 
from tuition.

Paul Courant, former University 

provost and current professor of 
economics, said it is important to 
look at how funding has changed on 
a larger timescale.

“The basic problem is this: there 

was a time, and it was way more 
than 14 years ago, when the state 
appropriation was a substantial 
fraction of the University general 
fund budget,” he said. “If you look 
at it over time, there is a steady 
decline. Tuition has to replace each 
one of those declines, but there is an 
inability of the state appropriation to 
keep up with inflation, let alone to 
grow.”

Affordability

The 
University 
maintains 

that it is fully committed to 
affordability, and the latest budget 
includes a 10.8 percent increase in 
undergraduate financial aid, which 
is the ninth double-digit increase 
in undergraduate aid in the past 10 
years. However, total funding for 
financial aid across the University 
has increased by only $120.14 
million since 2003.

University 
spokesman 
Rick 

Fitzgerald wrote in an e-mail 
interview with the Daily that 
the University aims to meet all 
demonstrated need for in-state 
students.

“No other state university has put 

as much emphasis on financial aid 
as U-M,” he wrote. “We continue 
to be the only state university that 
meets 100 percent of demonstrated 
financial need for in-state students.”

In his remarks to the board last 

Thursday, David Schafer, Central 
Student 
Government 
president, 

called for more student input on 
these decisions, as students are the 
ones impacted by changes in tuition.

“I have yet to hear of any 

structured student input on these 
decisions,” he said. “Frankly, I don’t 
get that. It makes little sense to me. 
We are the ones these decisions 
impact. We are the ones who bear 
the burden of balancing school 
while having to find an additionally 
paid work on the side … This is our 
future we are talking about. This is 
our education.”

Academic Excellence

Despite 
the 
University’s 

commitment to affordability, the 
general fund has still increased by 
approximately $802 million since 
2003 from tuition revenue alone — 
when discounting changes in state 
funding,

Fitzgerald wrote that, while 

much of the increase in general fund 
revenue stems from the increase in 
tuition, a portion of the increase in 
the general fund is accounted for 
by an increase in the proportion of 
out-of-state students, inflation and 
investments aimed at improving the 
University.

“Much of the revenue increase 

comes from the rate increase, 
but there also will be an increase 
in the total number of students, 
undergraduate 
and 
graduate,” 

he wrote. “And we anticipate 
an incremental increase in the 
proportion out-of-state students 
based on the rate of acceptances 
we’ve had from those students. The 
cost of running the University rises 
each year in part from inflation 
and in part from new initiatives 
and investments in technology 
and all the things that make U-M 
a world-class university.”

At Thursday’s regents meeting, 

Shauna Ryder Diggs (D) said that 
for the University to continue to 
improve, increasing the general 
fund is necessary, a view shared by 
Regent Laurence Deitch (D).

“Divestment is not going to lead 

us anywhere; that is not going to 
lead us to the future that we need,” 
Diggs said. “And in order to do that 
we need to spend the money, as 

Regent Deitch said, that will invest 
in our future.”

In an interview with the Daily, 

Schafer echoed this sentiment, 
saying there is a balance between 
affordability and quality.

“I think it’s so important to 

balance 
having 
an 
accessible 

and 
affordable 
education 
with 

maintaining the rich quality of our 
institution,” he said. “I think (the 
budget’s) attention to academic 
excellence and the high quality of 
this University, and, subsequently, 
the 
value 
of 
our 
degrees 
is 

important.”

Despite University’s highlight on 

maintaining quality, other similar 
institutions have not seen the same 
large increase in tuition revenue as 
the University.

Since 
2003, 
aggregate 
state 

funding for the University has 
decreased by 15 percent while the 
tuition revenue has increased by 135 
percent.

Ohio State University — another 

large, public research institution 
— has seen a 17 percent reduction 
in state funding between 2006 
and 
2015, 
but 
the 
institution 

maintained only a 52.8-percent 
increase in tuition revenue in the 
same timeframe. Ohio State has not 
increased tuition since 2012.

The University of California 

system saw a 15 percent cut in state 
funding between 2006 and 2013 
and experienced a 52.8 percent 
increase in tuition revenue during 
that time frame. The UC system 
also maintained a three-year freeze 
in tuition between 2011 and 2014, 
when its Board of Regents voted for 
a five percent tuition increase per 
year for the next five years.

While it is clear that the 

University has increased its general 
fund at a much faster rate than 
other 
comparable 
institutions, 

according Miles Kimball — a 

University economics professor — 
increasing the budget is essential 
to maintaining a high quality 
of education. Kimball cited the 
increasing wage premium for highly 
skilled labor as a source for the 
expanding budget, as higher salaries 
are becoming necessary to maintain 
a high-quality faculty. 

Kimball said the UC system is not 

facing fiscal challenges because it 
has not adjusted its budget to rising 
costs.

“You can always ruin your 

University, and basically the UC 
system has been going in that 
direction,” Kimball said. “It is 
actually very troubled by the kind 
of budget straightjacket that it has 
been put into.”

Courant echoed these sentiments, 

citing the so-called “cost disease 
phenomenon” in which the cost of 
highly skilled labor has increased 
rapidly while the productivity of this 
group has not changed. According to 
Courant, the University needs to pay 
higher salaries to faculty members 
to retain them and the quality of 
education they provide for students.

“The relative price of University 

activity, of University faculty in 
particular, as well as other skilled 
labor at the University, tends to rise 
relative to the economy as a whole,” 
he said.
Alternatives to Raising Tuition

According 
to 
Kimball, 
the 

University does not need to raise 
tuition to increase its revenue and 
budget size. Instead, Kimball said 
the University could systematically 
increase enrollment so that there is 
a both a larger student population 
and a higher proportion of out-of-
state students. The larger student 
body and the increase in the number 
of out-of-state students could then 
circumvent any need for tuition 
increases.

“There’s a missed opportunity 

where we could easily keep the 
tuition from going up simply by 
increasing the number of students,” 
he said. “I think that is a big missed 
opportunity, and, to the extent that, 
you miss that opportunity, you’re not 
doing an appropriate thing, because 
the appropriate thing would be to 
seize that opportunity.”

Fitzgerald 
wrote 
that 
the 

University 
does 
anticipate 
an 

incremental increase in the number 
of out-of-state students; however, 
while enrollment numbers have 
fluctuated in the past 15 years, the 
proportion of in-state students has 
remained consistently higher than 
that of out-of-state students.

The incoming fall 2015 freshmen 

class had 6,071 total students, 
57 percent of which came from 
in-state and 43 percent out-of-state, 
compared to fall 2000, which saw 
5,418 total students, with 58 percent 
in-state and 42 percent out-of-state.

“You’re going to have to increase 

the budget,” Kimball said. “But 
increasing the budget doesn’t mean 
that you have to increase tuition.”

According to Courant, to prevent 

rising tuition, faculty salaries would 
have to rise at a much slower pace 
across the board. However, Courant 
said this could lead professors who 
chose careers in academia to elect 
different professions, which could 
decrease the quality of University 
faculty. 

“You could imagine a world 

in which faculty salaries rose 
more slowly and there was less 
competition 
among 
universities 

for faculty,” he said. “And in that 
world the rate of growth of tuition 
necessary to cover the cost of 
the University would be lower. 
However, it might also be the case in 
that world that some of the faculty 
that are essential to the quality of 
the place now would choose to go 
into other lines of work.”

TUITION
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