Is Michigan higher ed headed for a shakeout?

Richard Vedder is a higher ed heretic. At a time when virtually everyone is pushing for more kids to go to college, the director of the Center for College Affordability & Productivity argues the traditional college deal is not what it used to be. With college graduates plentiful and jobs scarce, a diploma from a less competitive school doesn’t much impress employers, Vedder argues.

And he predicts several low-ranked Michigan colleges won’t be around 10 years from now -- nor will hundreds of others across the country. 

The University of Michigan need not worry. Vedder considers U-M to be one of the two top public universities in the country. (The University of California, Berkeley, is the other.) That ranking is considerably higher than the No. 71 spot PayScale.com gives U-M (by in-state tuition) in its latest ranking of more than 800 colleges and universities by "return on investment." 

Nor should the green and white of Michigan State University (No. 200 in the PayScale study) be concerned, Vedder says. But he does think less well-known public schools, with dwindling state aid, little endowments and poor records of return on investment, may close their doors.

"I think we're giving (students) advice that will turn out to be painful for them," he explained.

Michael Boulus of the Presidents Council State Universities of Michigan says Vedder should look again.

"Contrary to Vedder’s comments, there is good data on the value of a college education. For instance, the Bureau of Labor Statistics reports the unemployment rate in May for those with only a high school degree was 8.1 percent," Boulus said. "If you have only 'some college' or an associate degree, it was barely better, at 7.9 percent. But for those with a bachelor’s degree or higher, it was 3.9 percent.

"And a recent report by the Brookings Institution looked at the value of a college degree over time. It found that, 'On average, the benefits of a four-year college degree are equivalent to an investment that returns 15.2 percent per year. This is more than double the average return to stock market investments since 1950, and more than five times the returns to corporate bonds, gold, long-term government bonds, or home ownership. From any investment perspective, college is a great deal.'"

A record 41,600 people applied for the fall term at the University of Michigan, which earned the highest mark in Michigan on PayScale's assessment of "return on investment."

U-M spokesman Rick Fitzgerald noted that U-M's graduation rate, over a six-year period, is 90 percent, well above the national average of 56 percent. Donations and government money for research also are rising, and prove confidence in a U-M degree, he said.

“And our follow-up surveys with graduates show that about 90 percent of graduates are in jobs or in graduate school a year out,” said Fitzgerald.

Up the road in East Lansing, MSU, too, received a record number of applications -- 30,374 -- for the fall 2012 semester.

“So even though there are those who say higher education may be pricing itself out or nearing its ceiling, when you look at admissions, we don’t see that here,” MSU spokesman Kent Cassella said.

Cassella said the typical MSU student graduates with about $20,000 in student loans. “They go out and they get good jobs and are able to make reasonable payments to pay back the $20,000 in debt,” he said. “You add that all together -- plus, you have a degree from this top research university -- and that’s a good indication of quality.”

Eastern Michigan University in Ypsilanti has focused its value-enhancing efforts on increasing financial aid and leading the state in tuition restraint, explained spokesman Geoff Larcom.

Bridge archive: Michigan can't fit college grads into job slots

"You shouldn't confuse the immediate job market horizon with what ultimately happens over the long span of a person's career," Larcom said. “As you advance in your career, you'll find your character, your resilience, your energy, your ability to interact with people and exercise leadership skills -- which are often highly developed in programs such as the humanities -- really come out."

Jo Collins Mathis is a veteran journalist who has written for numerous publications in Washtenaw and Wayne counties. She was an award-winning reporter and columnist with the Ann Arbor News for 15 years, and a features page editor and columnist at the Ypsilanti Press.

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Comments

Jeffrey L Salisbury
Tue, 06/19/2012 - 8:58am
“So even though there are those who say higher education (insert the word: gasoline) may be pricing itself out or nearing its ceiling, when you look at admissions (insert: sales figures), we don’t see that here,” MSU spokesman Kent Cassella said. Look, MSU is my alma mater - love the place - but it, like all other institutions of higher education does not set salaries... but it sure sets tuition rates. Our 4-year institutions have been on a growth binge for 20plus years and Vedder is correct to point out their tipping point has all but arrived. It's time for a new business model that appeals to a more appropriate number of incoming students (perhaps 30 percent of a high school graduating class) - the rest might better consider "community college for all" since most of those offer realistic opportunities for job acquisition and career training and re-training throughout one's lifetime. As I said, I'm an MSU alum and I really do love the university - spend parts of three decades in the public schools - still am as an elected official - but it wasn't MSU that offered me, as a non-traditional student, the keys to a great career and life, it was Lansing Community College... now, there's a "college for one and all".
David Waymire
Tue, 06/19/2012 - 2:13pm
The fact is the universities set tuition rates based largely on state support. State support has been cut by 30 percent in the last decade, forcing tuition up. Research by Business Leaders for Michigan shows that university general funds (tuition plus state support per student) adjusted for inflation is DOWN $400 over the last decade. Elected officials need to stand up and demand more support for higher education if they care about our state's prosperity going forward. The states with the highest per capita income also have the highest percentage of college graduates in them. Rationing higher education is the worse economic development idea ever.
Jeffrey L Salisbury
Tue, 06/19/2012 - 2:42pm
Oh good grief... think about this for a moment... "adjusted for inflation is DOWN $400 over the last decade" --- I mean, does that make ANY sense whatsoever? BLM's stats NEVER make any sense. And if they are called out for it, no one there cares. College tuitions soar each year, advancing far in excess of the inflation rate. The overall inflation rate since 1986 increased 115.06%, which is why we pay more than double for everything we buy. On the other hand, during the same time, tuition increased a whopping 498.31%. See chart below. http://inflationdata.com/inflation/inflation_articles/Education_Inflatio... For example, if the cost of college tuition was $10,000 in 1986, it would now cost the same student over $21,500 if education had increased as much as the average inflation rate but instead education is $59,800 or over 2 ½ times the inflation rate. Our universities offer parents and students only a bloated business model and it's long past time they all did some right-sizing.
Jeffrey L Salisbury
Tue, 06/19/2012 - 2:57pm
Need another source regarding soaring tuition costs - adjusted for inflation of course - ? For the 2009–10 academic year, annual prices for undergraduate tuition, room, and board were estimated to be $12,804 at public institutions and $32,184 at private institutions. Between 1999–2000 and 2009–10, prices for undergraduate tuition, room, and board at public institutions rose 37 percent, and prices at private institutions rose 25 percent, after adjustment for inflation. SOURCE:U.S. Department of Education, National Center for Education Statistics. (2011). Digest of Education Statistics, 2010 (NCES 2011-015), Chapter 3 . http://nces.ed.gov/fastfacts/display.asp?id=76 Feel free to send this along to BLM for their edification.
Don
Wed, 06/20/2012 - 8:59am
The solution is simple; when support is cut, you cut staff. As I point out below in my comments, neighboring state universities need to share administrative and professional staff, rather than each instution having their own staff hierarchy. Just like any large corporation, you don't need redundant staff in every physical location. Local K-12 school districts share staff; why not state colleges and universities?
Matt
Tue, 06/19/2012 - 4:02pm
As to the 15% ROI on your college tuition ... This gets a resounding "It depends"! Does anyone with a BA in social Work, Journalism, Elementary Ed, Sports Management or any of the dozens of fluff majors that the U's have ginned up (to collect $$$ from kids who shouldn't be there) want to take that bet? Unfortunately for these poor smucks, the U's along the BLM type crowd etc, they've done a great job convincing a bunch of kids that they just need to hang out at and fork out big bucks to any college for 4 - 6 years and Va La success is guaranteed! In reality for many, they know nothing, don't know how to do anything and are just deep in debt! It's high time the state - tax payers - cut back and rethink their investment in the higher ed bubble.
Don
Wed, 06/20/2012 - 8:54am
The problem with Michigan colleges is there is way too much overhead in the system. Look on the map and you often find several state universities within a 50 or 100 mile radius of each other. Why don't they get together and combine their administrative staff? We can't afford to have five budget and finance staffs, five personnel staffs, etc. all doing the same thing, when they could be combined. Similarly, they each have their own specialists like "diversity coordinators", all encouring minorities to come to their school. Why not have one combined staff who gives the students a recommendation based on the student's needs, not the schools? Every large corporation has undergone significant downsizing, combining of staffs, etc. except Michigan's state colleges and universities. It's time they look at their so last century overhead staff organization and started sharing positions. The taxpayers and students deserve it.