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

A “perfect storm” of falling wages and state disinvestment has made Michigan a tough place for low-income students to attend college.

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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Fri, 09/06/2019 - 7:58am

So, Ron if college affordability is the crisis you portray why aren't we seeing ballooning enrollment instead of declining enrollment at community colleges that cost 1/3 of the U's? Something doesn't compute here. Or is this just kavitching that we can't have everything exactly the way we want?

Fri, 09/06/2019 - 8:58pm

Yes .... but that doesn't explain why if college is such the burden as is described here why aren't kids taking the opportunity to save big bucks by using community colleges for their first two years. One should be skeptical of the narative.

Mike C
Tue, 09/17/2019 - 12:45pm

More parents being fleeced of their money, that's why. About 30% of these kids would be better off going to trade school, getting paid to learn a skilled trade. Most should consider Community Colleges for the first two years, but many 4 year institutions use the threat of "not being accepted into the school of xxxx" if you do not start your Freshman year at ------- (enter college name here). These schools are professional fisherman, fishers of students. They get paid for you to take your money, and give it to them.

Fri, 09/06/2019 - 8:29am

Also confused "a progressive non-partisan think tank", what is that? Verses a "partisan conservative or Libertarian" think tank?

Barry Visel
Fri, 09/06/2019 - 8:57am

Why is a New York based foundation interested in the cost of higher ed in MI? It would add to this article if we knew who commissioned this study. Also, it seemed almost a footnote to mention that universities themselves have stepped up to help with tuition cost. How does that compare across the Country?

Vincent Schumacher
Fri, 09/06/2019 - 9:19am

May I make an observation and a modest suggestion?
I see a lot of campus construction -- very attractive new buildings -- clearly intended to impress visitors and gratify proud alumni.
What is invisible is the struggle of students' families to pay tuition and ancillary costs. Also hidden from view is the extensive short-sighted employment of "adjunct" instructors on limited contracts for below-journeyman weekly wages.
Is this not a poor allocation of resources? I once knew a respected naval officer who often commented, "A good teacher can teach in a tent!"

Priorities, people! Priorities!

By all means, Michigan's public universities must maintain and improve their physical assets. But take care that they do not become exclusive preserves for pampered progeny of the privileged.
Or worse: museums -- relics of a tradition of scholarly excellence.

Vince in Grand Rapids

Fri, 09/06/2019 - 1:05pm

I believe a lot of campus building construction is from endowment fund income or rich alumni donating a ton of money to the university to construct a building for a particular campus academic program or athletic purpose, usually with the donors name attached to the building as a "thank you" from the university. In other words its not coming directly from student tuition.

Fri, 09/06/2019 - 1:58pm

As the previous response states, donations and endowments account for some new construction, but also, in Michigan, state university building construction does not come from the higher education funding budget, precisely to avoid a zero-sum game between construction and university operations. It comes from the capital outlay budget, from which the funding for all other construction of state buildings is appropriated.

Brian Metcalf
Fri, 09/06/2019 - 9:41am

You indicate that Michigan is the 9th lowest. Does that mean that there are 9 states that support higher ed with more money? Or does it mean that 41 states support higher ed with more money?

Sun, 09/08/2019 - 8:08am

41 higher than Michigan

Fri, 09/06/2019 - 2:31pm

Why is it that whenever there is a Bridge article about education it is only about money?
Why don’t the editors believe that the readers are interested in what is being done with the money, how is the money improving learning, how its helping students, what value will be created with the additional moneys or isn’t it doing any of that?
We regularly hear that that people with a college degree earn a million dollars more than those without, and then we hear how those same people are struggling with student loan debt, which is it they earn more but it isn’t enough to pay for that degree? Could it be that the type of degree the students earn determines whether they can pay off those student loan? If Bridge truly cares about readers understanding the financial issue of education, why aren’t they reporting about which degrees better help students to earn incomes that pay back the loans, and help them pay the taxes the colleges want? Why doesn’t Bridge report on how effective the college/universities are spending to student success after earning their degrees?
What is most important how much money the universities have to spend or how beneficial that spending is for the students? At least to Bridge simply do a count of how many articles are about money for education and how many are about student learning success.

Mon, 09/09/2019 - 11:36am

Maybe what you suggest is beyond the scope of their resources to do the subject justice, such an analysis is probably more suited to full fledged term paper and they don't want to get into that level of analysis.

Mon, 09/09/2019 - 5:22pm

You are probably right. Bridge seems a lot like a student struggling with their resource of time, wanting to learn but not having sufficient desire to know to make the necessary effort..

You raise a good question, what is Bridge's scope of reporting? Does Bridge have limits on what it asks the schools, does a bias toward added school funding affect those limits? Does that limit it to reporting on money and considering value?
We have read articles on Bridge about the difficulty people are having earning an income that they would be considered 'middleclass', outside reading indicates the coding/programming is a proven path to the Bridge's 'middleclass', so why shouldn't Bridge be asking how many new coding/programing classes the colleges/university would create with this added money from the State? For the foreseeable future the demand and pay for programmers/coders has is unlimited demand, so why shouldn't the public hear about whether their tax dollars will be helping their children/these tax payers to learn programming/coding?

Why wouldn't you think asking the colleges/universities about whether they would spend any of the money on adding classes that could help people prepare for in demand jobs that would pay enough to pay for student loans is beyond Bridge's scope or resources or require the work necessary to develop a 'term paper'?

Fri, 09/13/2019 - 10:04am

They could ask those questions and they are good ones but I suspect they would rather not talk about what specific areas they spend money on, thinking people are trying to micro manage what they are doing.

Fri, 09/06/2019 - 2:33pm

Real wages are significantly impacted by two basic economic factors. 1 Rising taxes and fees placed on anything you purchase and 2 by increased labor.
College prices have doubled because of the increase in demand. Consequently, capital investment follows. A demand that is fueled by tax payer dollars to support the false notion that you need a college degree.

David Waymire
Mon, 09/09/2019 - 3:55pm

False notion that you need a college degree? Hmmm....let's ask every CEO in the nation if they want their kid to get a college degree, or just head out to the job market after high school. Ok, results are in: Every CEO is sending their kid to college. Some of the Jared Kushner's dad...will buy massive buildings at the school of his son's choice to get Jared into college. Almost everyone who says you don't need a college degree is sending their own kid to college.

Mon, 09/09/2019 - 9:45pm

Need a college degree can be misleading, Bill Gates did pretty well without one.
For many employers a college degree is simply a screening tool for new hires, aside from specialty based jobs [accountant, engineers, scientists, programmers] what knowledge and skills do degrees provide that a person can't develop by experience and independent studies?
How many CEOs with college degrees fail, how many small companies with plus or minus 100 employees whose founder is CEO and has a degree? If you are only talking about the largest 100 companies than have been around for 50 years or more have CEOs that came out of sales and have a non-technical degree that are CEOs [they used it to get hired but did the need it from a knowledge and skills perspective?]? I can see how earning a business degree can help in understanding principles of business and concepts of organization, and even more an MBA who provide more business knowledge that a sociology or political science or engineering degree, but just any degree, I doubt that. Though if you look at how Facebook, Google, and Twitter screwed up the social side of their technology, you might make a case for philosophy or logic.
Your examples are more about social norms than about actual need, don't you think Kushner learned more about real estate at his father's knee than he did in school?

Sat, 09/07/2019 - 5:01pm

Reduce / eliminate scholarships and tuition will drop drastically. Don't need Liberal Arts professors and others at Public Universities making $150K+ per year plus very generous benefits of health care, vision, dental, 401K, etc.

Sun, 09/08/2019 - 7:53am

I’d like to see the expense reports of the universities before saying we have an income problem. I would guess for many of the institutions it’s more like a spending problem. Where is all the money going?

Mon, 09/09/2019 - 2:33pm

State universities' budgets are public documents and are available on the universities' websites. Finding them via Google takes less time than posting a comment .

David Waymire
Mon, 09/09/2019 - 3:59pm

Exactly so. Google House Fiscal Agency and you can easily find a report on every college's spending. And if you go back to 2000, you will see that spending ... the overall cost of delivering a degree...has gone up about at the rate of inflation (and by less than personal income). But the state's share of that cost has decreased dramatically, as the article rightly points out.

Mon, 09/09/2019 - 3:55pm

Getting free tuition at U of M is a double edged sword. Who provides the poor student everything the rich students parents can afford to provide: contacts, semester abroad, car, extra money?

Mike C
Tue, 09/17/2019 - 12:41pm

This is another tragic example of how when there is government intervention (with guaranteed student loans) there is gross costs increases and inefficiencies. The explosive salaries and bonus' paid to College Executives (see criminal Mary Lou Simon getting to keep her state taxpayer based Millon$$ paid to her!) and tenured professors have made it near impossible for a young person to "put themselves through college" without parental of student loan assistance.