Michigan is turning students into beggars

For more than a decade, Michigan’s elected officials have imposed what amounts to a severe tax on the hundreds of thousands of students who attend our public universities. The consequences of this “college user tax” – clearly amounting to millions of dollars per year – include raising the cost bar for young Michiganders to attend college by thousands of dollars, saddling graduates and their families with crushing college debt and making higher education impossible for others.

Worse, it is eroding Michigan’s ability to resurrect our struggling economy. According to a study released this week by Bridge Magazine: “Michigan families pay more to send their children to state universities than families in almost any other state.”

The reason? A “decades-long decision to skim money from the state’s 15 public universities.”Michigan gives less money to its public universities than almost any other state. As state support drops, more of the cost of college is shifted to students and their families.

Bridge’s analysis found that 12 of Michigan’s 15 public universities had net student costs higher than their peer institutions across the country. The University of Michigan, for example, had a net cost per student of $16,888 in 2008-2009, the most recent year available -- more than $4,000 above equivalent institutions.

Michigan State, at $14,708 net cost, was 15th highest of 73 schools in its peer group.

Only Wayne State, U-M Dearborn and U-M Flint had prices below their peer group averages.

Perhaps the most striking finding concerns Grand Valley State University in West Michigan. There, a four-year graduate pays an average of $23,000 more for a diploma than they would at an average, comparable out-of-state university. Grand Valley has the sixth-highest net cost and the third-lowest state support in a group of 161 similar universities. The bottom line: “GrandValley has essentially been privatized,” says Matt McLogan, vice president for university relations at GVSU. “It’s publicly owned, but is no longer publicly supported in any way that people would recognize.”

Michigan’s “college user tax” is a  major problem. For example, the Bridge study found that a four-year, in-state graduate from U-M will spend an average of $33,860 more than a “Tar Heel” native would for a diploma from the University of North Carolina.

Bridge concludes that “Michiganpublic universities cost more because they are subsidized less by the state than public universities at other states.” And the situation has been getting worse. Between 2005-2010, Michigan chopped around 20 percent from state support for four-year colleges; only Rhode Island and New Mexicocut more.

Last year, Gov. Rick Snyder and the Legislature whacked another 15 percent from higher education for the current fiscal year. Michigan, which once was renowned for public higher education, is now among the bottom 10 states in per-capita spending on it.

When I served on the Board of Regents at U-M in the 1980s, money from the state roughly equaled what the school generated via tuition and fees. Back in the 1970s, the school got three times as much from the state as it took in from students.

Today, reverse those figures from the 1970s: one-quarter comes from the state, three-quarters from students and their families.

Former Michigan President James Duderstadt told Bridge, “Elected officials have decided thatMichiganwill have one of the lowest levels of public support for higher education in the country. They decided that college isn’t a public good, but a private benefit.”

Well, an education certainly does benefit who receives it. A college graduate earns an average of $1 million more than a high school graduate over a lifetime. And sharply increased tuition doesn’t seem to have reduced demand for university admissions. In the past, however, state policy-makers reasoned and understood that an educated populace was a benefit to the state, not least because low-cost access to college was the single greatest way for people to move up the social ladder – the promise of America.

And now more than ever, there are economic benefits, too. The state Cherry Commission on Higher Education and Economic Growth found in 2004 that states with the highest percentage of college graduates are the most prosperous. The Michigan Economic Development Corp. estimates that higher education is highly cost effective, generating $26 in revenue for every dollar invested.

Estimates vary, but Bridge found that just to reach the middle of the pack,Michiganwould have to increase funding for higher education by 56 percent. To get to the national top 10, we’d have double today’s spending. That would means either higher taxes or recasting priorities -- most likely, both.

 Based on past state political practice, that seems unlikely … though disgraceful. Michigan has adopted a policy of “beggar our best.” We spend more on warehousing felons in our prisons than on educating our young people in college.

If we keep it up, we’ll all pay a terrible price.

Matter of fact, we already are.

Editor’s note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics. He is also the founder and president of The Center for Michigan, a nonprofit, bipartisan centrist think-and-do tank, designed to cure Michigan’s dysfunctional political culture; the Center also publishes Bridge Magazine. He is also on the board of the Center’s Business Leaders for Early Education. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

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Tue, 01/10/2012 - 9:24am
Phil - it is a shame when you think about it. I hear of so many students who have the grades but cannot get into the Univ of MI do to the high recruitment of out of state / international students since their tuition is even higher than instate. When you've lived in Michigan and your families have paid taxes that go into the general fund which appropriates funds to education, your child should be able to attend if they have the grades. Look at the group of business leaders in California that realize the importance of higher education and their willingness to increase taxes for that purpose. We are selling our children short. Elementary, high school, and college all need to be moved to the top of the charts in educational requirements and accessibility for Michigan children.
Pat LePage
Tue, 01/10/2012 - 9:43am
I have thought this was the case for years. I recently completed sending/paying for 3 children to attend MSU, UMFlint & Western Michigan Universities. It certainly was a struggle but also a requirement to have a college degree. It certainly is no mystery to me that we pay more. This just validates it. Gov Snyder continues to do the same thing + tax the seniors who can afford it most to pass the $ onto Big Business. When will the electorate figure this guy out.
Tue, 01/10/2012 - 12:07pm
Now is a perfect time to turn our higher ed funding idea on its head. Zero out the old political patronage system of giving money directly to the U's and replace it with a multi-year (10?) tax credit to reimburse graduates (or anyone with post secondary ed) AND paying Michigan taxes, for college or other educational costs. (Use to pay student loans?). This eliminates the college aid disparity between schools. For that matter we'd be smart not to discriminate even between public, private or even out of state choices - if our objective is to attract and keep graduates (and future tax payers)! Who cares where our citizens went to school? Best of all our big state u's would hate this! And between graduates leaving the state and the multitude of non-economically viable degrees being cranked out this likely would cost less than one would think. Now that we have a governor that understands economic incentives, who knows what is possible?
T. W. Donnelly
Tue, 01/10/2012 - 12:18pm
It is a disgrace the way our present legislature and Snyder choose what to underfund and whom to tax. The high costs of a university education predates all of them. To me, there is a spiritual and ethical matter to consider: what is the public good in pre-K to university education?Personally, I consider education as vital to our State's future overall well-being and well worth the resources used to fund it. But if one is afflicted by the "bean-counter" mentality, one only sees dollars on a ledger. Snyder and the Tea Party types in Lansing want the lowest dollar cost for the most important service that education offers. With their fiscal blinders on, they can see nothing else. We need to rid ourselves of these myopic cretins.
Tue, 01/10/2012 - 4:17pm
Our Republican governor, his attorney general and his partisan supporters would rather jail pot smokers than lower the cost of education. They would rather provide tax breaks for the wealthy through our outdated flat, state income tax rather than institute a progressive income tax. They would rather provide tax breaks than incentives to business that won't hire without a demand for their products anyway. In the end, education suffers. In Germany education is basically free; here it's potentially a lifetime of debt as banks make money off federally guaranteed student loans. If businesses can file bankruptcy, students should be given the same right.
Tue, 01/10/2012 - 8:37pm
Obviously the point of the article is politics and not education or what is done with the education.. I wonder if the cost of college is so prohitive how many of the 15 school have empty slots or are all filled, what is the graduate rate for those schools and how does it match the cost to the students, what is the distribution of degrees, what is the employement rate 1,3,5 years out. That is if you want to only focus on the cost to the individual student. I wonder what the total cost for the education including what the rest of the State, endowments, licensing, etc. pay for the institutions pro rated per student. I would how the schools would rank then. It would be interesting to see what the inflation rate of college tuition is versus that of the wages (to make it simple us minimum wage), has tuition double, tripled, what , and how have wages done in the same time frame. It seems easy to pick one factor and heap everything on that to make a political point for unless the broader picture is include it seems nothing more than 'spin'.
Mike R
Tue, 01/10/2012 - 9:05pm
Bravo to Phil, Bridge, and The Center for Michigan! And while we certainly need a full airing of new ideas and approaches, the tax credit "solution" of Matt's posting is simply the same tired old conservative "supply side" economics trumpeted, then hurriedly abandoned, by the Reagan Administration, where lower taxes or tax credits are the solution to everything under the sun. What good are tax credits to a student who doesn't make enough to pay taxes? Credits may be useful after the fact, but they do nothing while the student is in school. The goal here is to enable more Michigan residents to become Michigan university students without taking out enormous loans, not to reward them afterward for having gone deeply into debt (or having been wealthy enough to fund their own education). In the agenda of the current radical conservative legislature and the administration it apparently holds in thrall, the shifting of college costs from the state to the individual is simply an extension of the "logic" of gutting public schools in favor of private and charter schools (attended by their own children and those of their wealthy benefactors), and in favor of business. This amounts to the abandonment of public education, the most important of the core functions of state government.
Wed, 01/11/2012 - 11:09am
That is exactly my point with a tax credit that helps graduates residing in Michigan with the debt they accumulated getting a post secondary education. Michigan doesn't have the money to give to a kid who takes his Michigan Tech engineering or CMU elementary education degree to Texas or waste it on someone who mistakenly believes that a degree in pottery or gay studies provides any basis to support themselves.BTW I notice that the tax code is full of tax credits that you folks on the left have no problem with so what's with the Reagan reference?