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Report: Funding cuts, high tuition spawn a cost crisis at Michigan colleges

Michigan families are facing a college affordability crisis caused by a “perfect storm” of falling wages and state disinvestment in higher education, according to a new report released Friday.

That affordability crisis is hitting hardest among Michigan’s rural and low-income families, according to the report, by the New York-based Century Foundation, which describes itself as a progressive, nonpartisan think tank.

The report comes while Michigan’s GOP-controlled legislature and Democratic Gov. Gretchen Whitmer are tussling over the 2019-20 budget, which includes funding for higher education. Whitmer has proposed a 3 percent overall increase for the state’s public universities and community colleges, to slightly more than $1.7 billion. The Senate version of the budget offers universities a 1 percent increase; the House version, 0.4 percent.

Related: Being poor on rich U-M campus still a struggle as school broadens reach

The Whitmer administration pounced on the report as further proof that higher education funding needs to be increased.

“Today’s report underscores the fact that decades of disinvestment in higher education have pushed our state further behind,” said Tiffany Brown, spokeswoman for the governor. “We must work together to build affordable pathways to success for every student, including those coming out of high school as well as adult learners returning to the classroom.” 

The Legislature and the governor need to reach an agreement on the budget by Sept. 30.

Michigan leaders have set a goal of 60 percent of working-age adults with a post high school credential or degree by 2030 to meet the expected demand for a more highly educated workforce. Currently, 44 percent have a post-high school certificate or degree.

That goal isn’t likely to be met without increasing the rate of college enrollment and completion among high school graduates. That won’t happen if college continues to be unaffordable for a large segment of Michigan families, said Jen Mishory, senior fellow at The Century Foundation and co-author of the report.

“Michigan is facing a perfect storm in college affordability,” Mishory said in the report. “You have a state government that has sharply cut funding to students and failed to address a weak and poorly designed financial aid system. 

“On top of that, tuition, fees, and living costs continue to climb faster and faster, while real wages for most Michigan families have actually fallen. What you’re left with is a system of higher education that is increasingly unequal, unsustainable, and out of reach, especially for those Michiganders most in need.”

According to the report:

  • Michigan has cut state appropriations per student by 40 percent since 2000. Currently, the state allocates $5,492 per public university student (12th lowest in the nation) and $3,265 per community college student (15th lowest in the nation).
  • In 2018, higher education comprised just 4.1 percent of Michigan state budget expenditures (ninth lowest in the nation), compared to a 50-state average of 10.1 percent
  • Partly because of lower state appropriations, Michigan’s public universities have higher-than-average tuition rates. Since 2000, the sticker price at the median Michigan public university has doubled. The amount of tuition Michigan public universities collect per student is highest in the nation.
  • Families don’t get much help from the state in paying tuition ‒ the state also is among the stingiest in the nation in financial aid. Combined, state and local aid reaches only 18.9 percent of community college students and 17.5 percent of public university students.
  • Because of low financial aid, Michigan low-income families pay significantly more as a share of family income than their more affluent neighbors. The average net tuition price (cost of attendance less grant aid received) at the median Michigan public university demands roughly 32 percent of income for a family making $30,000, compared to only 16 percent for a family making $110,000.

Brown, the Whitmer spokeswoman, said the findings point to the importance of several steps taken by the administration, including the MI Opportunity Scholarship, which she said “will ensure every high school graduate can access a tuition-free community college education and lower the cost of a four-year degree for low- and middle-income students. 

Kim LaSata, R-Bainbridge Township, chair of the Senate Appropriations Subcommittee on Higher Education, could not be reached for comment late Thursday.

The report’s findings didn’t surprise Dan Hurley, CEO of the Michigan Association of State Universities, which represents the state’s 15 public universities. Hurley said in an email response to Bridge that he hoped the “perfect storm” characterized in the report “does not dissuade students and families interested in earning a postsecondary degree from considering attending college.

“When it comes to providing financial aid, where the state has walked away, its public universities have stepped up,” Hurley said. “In fact, on average, students attending a Michigan public university pay 40 percent less than the full cost of attendance when all forms of financial aid are accounted for.” 

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