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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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