To return Michigan to prosperity, fund higher education

Dan Hurley

Daniel J. Hurley is chief executive officer of the Michigan Association of State Universities, based in Lansing.

In today’s economy, it’s a perilous proposition for anyone to ignore the reality that for our youth, the best path to a middle-class job is through college, with a four-year degree a vital waypost.

That being true, it’s imperative that we take steps to recognize the vital role of our public universities in creating college graduates for Michigan, and for our state to reinvest in our talented students in a major way.

Let’s start with the data. Nationally, since 2010, the U.S. economy has added 11.6 million jobs. Of those, 72 percent went to those with a four-year degree or beyond. Here in Michigan, less than one-third of residents possess a four-year degree. Less than one percent of new jobs went to those with a high school diploma or less.

That means we are missing out on many well-paying jobs being created in America, and Michigan in particular. And make no mistake, if our state’s youth want to earn a good living, work steadily and not face frequent layoffs, they will need a four-year degree. According to the Bureau of Labor Statistics, the median weekly earnings of someone with a bachelor’s degree is $1,137, and the unemployment rate of those with a bachelor’s degree is 2.8 percent. By comparison, those with an associate degree or its equivalent are earning on average $798 a week, with an unemployment rate of 3.8 percent.

We know cutting taxes doesn’t help attract college graduates. We’ve cut our state’s effective tax rate by 25 percent since 2000 – cutting support for universities and cities along the way – and we have still lost population, particularly college graduates. The places attracting college graduates are cities such as Chicago and Minneapolis (which are not low-tax communities). Michigan’s failure to attract sufficient numbers of college graduates makes it more important than ever that we “home grow” our talent by making it possible for more state high school graduates to have access to affordable public universities.

The state’s higher education marketplace is speaking. From 2008 to 2016, enrollment at the state’s community colleges and private colleges fell by 15 percent. Meanwhile, they grew by one percent at Michigan’s public universities, even as the number of high school graduates was declining. That’s not enough to meet the demand for college graduates, and universities are pushing to get more students ready to enroll and succeed in achieving a four-year degree.

Those students attending public universities do their homework. They know that Michigan’s public universities have a similar or lower net cost of attendance (all costs minus financial aid) compared to others around the nation – and all have higher post-graduate earnings than the national average.

They know that our universities’ graduation rate, on average, is 66 percent, even though only 44 percent of our students attend full time. That’s better than in most states, and universities are not complacent about that figure. Each one is implementing new programs and using success strategies to increase that figure.

Some argue that because Michigan universities don’t graduate every student immediately, and every student doesn’t stay in Michigan, we shouldn’t support our universities. That’s not a very strategic look at the situation. A recent review of students graduating from Michigan Technological University found that the state income tax paid just by its most recent class of graduates more than offset the increase in state appropriations the university received. In other words, state tax dollars invested in higher education have a real, quick, and tangible return on investment.

Despite this reality, Michigan has cut operating support for college students from $9,387 a year in 2000 (in 2017 dollars) to $5,217 per student today – a 44 percent drop. That’s forced universities to raise tuition, and cut back on programs in certain areas. This state-to-student cost shift in paying for a public college education in Michigan has resulted in higher “sticker price” tuition rates, and ultimately, student loan debt levels.

One of the reasons less than half of our students attend college full-time is this lack of financial assistance. The state of Michigan slashed its need-based financial aid to students while it also cut operating support, in turn putting the onus on public universities to allocate huge sums toward financial aid to ensure college access to low- and middle-income families. The state’s nonpartisan House Fiscal Agency even published a report showing that tuition increases are entirely explainable by state funding reductions, institutional financial aid increases, and inflation.

Michigan today ranks 32nd in the nation in the share of college graduates in its population. It also ranks 32nd in the nation in per capita income. The two numbers are inextricably linked.

If we want to put our state back on the path to prosperity, the best strategy is to prepare, retain, and attract college graduates. Given the difficulty we have had in attracting adequate levels of talent required to power Michigan’s economy, the state’s wisest policy would be to redouble investment in our state’s college students and in its public universities.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

About The Author

Daniel J. Hurley

A guest author for Bridge Magazine.

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Comments

Patricia
Fri, 04/14/2017 - 1:58pm

Mr. Hurley obviously has a horse in this race as the CEO of the Michigan Association of State Universities. Yes, education is important. No, pumping more millions into our colleges will not return Michigan to prosperity. The United Way study that revealed over 60 percent of jobs created in Michigan are service industry jobs (paying $20 or less per hour) tells us that the billions of dollars pumped into Michigan's public colleges and universities over the past decade haven't returned the state to prosperity. On the contrary, as our state has poured more money into higher education, graduation rates have fallen and students have entered the employment market with fewer of the skills desired by employers.

What is needed is absolute transparency in these public institutions for every dollar received and spent. U-M thumbs its nose at the state's FOIA statute and most recently under Mary Sue Coleman doled out enormous bonuses to select administrators secretly.

The 50 percent of Michigan's public college students who don't graduate in 4 years are left drowning under an average of $11,000 in student debt per year.

This essay is a shameful bit of PR puffery and I expect better from Bridge Magazine.

jesse
Sun, 04/16/2017 - 8:02pm

Well said Patricia. Every educator has espoused this same mantra for decades...."Education needs more money".....and what has that extra money acheived....NOTHING but More taxation.

John Q. Public
Fri, 04/14/2017 - 3:29pm

While we've spent the last twenty-five years expanding the farm, our graduates have seen Paris and Broadway.

Mark
Fri, 04/14/2017 - 4:57pm

Are you kidding me? More State Tax Dollars for Colleges! Colleges are a Cash Cow, they are flush with Cash. Let's start with a 5 Year Pay Freeze for all Professors, and a 10 Year Moratorium on any new Building Construction. Also, for Michigan's top universities change the protocol and tap into the University Endowments.

More Money to Colleges will have no affect on training or retaining or attracting college Students.

Allan Blackburn
Sun, 04/16/2017 - 5:02am

And you know this by how? Let's freeze your pay for 5 years until you prove your worth and accountability. We have demonized education, the institutions and the teacher for far too long. Our I'll informed electors is a direct result. Many students shouldn't be going to University now as many degrees won't lead to the success of the past. Trade schools will lead to good middle class wages and help to replace an aging work force.

Mark
Sun, 04/16/2017 - 4:08pm

Allan- You made my point. Colleges are over-rated, more money is not the answer. Increase Skilled Traded Training. There are so many Skilled Trade / Construction Jobs available today and will be for many many years to come. Unions cannot find enough / qualified Detroit residents to fill these jobs.

Allan Blackburn
Tue, 04/18/2017 - 9:06pm

Don't believe I did make your point. After 8 years of post high school education after the military I became an executive earning over $130K per year. I don't believe I would have earned that much without a college education. All I was stating is that unless you receive a highly technical degree now, the jobs are not there. We have demonized teachers for many years, made them contribute more out of their own pay to fund their retirement and healthcare, lowered their pay and the statistics bear out that teaching programs are struggling to fill their field. Maybe we want our kids being taught by the private sector where the pay is lousy and the curriculum and finances are not accountable to public scrutiny but, I believe our electorate is a prime example of a misinformed and a lacking in critical thinking approach to politics and the importance of the issues that shape our everyday life. I was merely stating that some of the degrees lack the ability to support a middle class lifestyle. My father worked for McDonald-Douglas corporation and supported a family of 5 with healthcare insurance for all of us and he retired with a pension and his social security. He didn't have a college education. I also did very well in my lifetime but the times were different. Now young minds definitely need to be guided in to a career path that will support them in a highly specialized world. Higher education can still be a path to an amazing career. I was merely stating that there are other pathways to success.

Merry
Fri, 04/14/2017 - 6:08pm

As a person who has recently worked with Michigan's young people to help them plan their futures, I agree with Mr. Hurley. The kids who go on to college and major in needed skill areas end up with decent steady jobs and are success stories. What is lacking is a partnership between business and industry who can tell the colleges what exact skills they will need and college counseling offices that relay that information to college students, parents and high schools. It is important to offer better financial aid to students who set their goals toward fields that need applicants. More money and planning needs to go into this in Michigan if we are to compete nationally for good jobs and well educated citizens.

Matt
Fri, 04/14/2017 - 8:07pm

Rather than doling more money out to the U's how about if we take all the state higher ed funds and establish a process to partially reimburse all Michigan residents for their actual investment in higher education? A substantial tax credit for a certain period of years after graduation should work nicely! Should we really care whether a resident attended MSU or Hope College if they're living in Michigan making a contribution to our economy? Or even attended an out of state school? This will show grads how much we appreciate and value them and their efforts! And further this approach would end and the political fighting between the U's for this funding. From reading Mr. Hurly's essay, how could he disagree?

duane
Sat, 04/15/2017 - 2:08am

Mr. Hurley talks about graduation rates, about what graduates can do with the knowledge and skills they develop while in school, but he fails to mention about any expectations of the colleges and universities. He seems satisfied with what they are doing and what they have done but nothing about how they are changing and will provide more value to the students and their communities with all that new money he wants for them.

He seems to think the taxpayers should simply give them more money on hope and a prayer that the schools will give added value for that money. My reality is and has been that I should always be looking for best value for the money, whether it is my own or my employer's money. I am held accountable for what I spend, when it is other people's money I have had to describe what value the spending will provide before I got the money to spend. When it is my money we have to decide what value for the money since we can't be careless with it for we can't simply ask for more of other people's money to cover what I have spent, or want to spend.

In the times we have been through, and how so many have struggled to be frugal with their money, Mr. Hurley seems a bit cavalier if not arrogant about spending other people's money. Aside from the dynamics of intercollegiate sports and the changes the schools have to make to stay competitive, I see or hear nothing about changes/innovation/new and greater value the schools are or will deliver.
The idea of accountability seems to escape Mr. Hurley's consideration when it comes to spending other people's money.

Matt
Sun, 04/16/2017 - 9:12am

The left's (and some others) consistent answer to every problem or desire is more money (and preferably from the state). And if that's your mindset, everything is so simple. Want to increase MI's prosperity as in this article? Simple, Pay for more kids to go to college (public only). New York starting a great new experiment. Maybe we can just add 4 years to everyone's, school K - 16? And never mind all the unintended consequences and incentives just pass a law.

duane
Sun, 04/16/2017 - 10:33pm

It is either out of their ignorance or their self interests that they assure their failure in changing results.

For all the good intentions and good ideas without definitive result expectations/performance metrics, no matter how well intended they are or how much money they spend there will be no change in results. They fail to understand/accept/risk that without measuring results there will be no results because people will not know if what they are doing is achieving anything other than what they measure [if they measure money receive they will get more money, if they measure spending they will spend more, but if they don't measure results they will get none].

Mr. Hurley only counts money and graduations so all he will get is money and graduations [independent of the value of such degrees]. If he wanted to deliver results that provides value to taxpayers for their money he would describe the metrics he uses to measure that value.

Mother in Midwest
Tue, 04/18/2017 - 7:09am

I live the comments calling for direct aid to Michigan residents to attend schools. Support the students, not just the institutions. More student grants and tie it to residency and instate schools.

Joshua
Tue, 04/18/2017 - 3:35pm

My daughters are top students and diehard Wolverine fans, but I'm suggesting they go out of state for college. Why? At many of the top universities (Ivies, Stanford, etc.), they will get a free ride because my income is below $100,000. At Michigan's universities, they will end up with a lot of debt, just like I did. Will they come back after graduation? I don't know. For people who value education, there just isn't much here.