Rising tuition threatens Michigan education goals

By The Associated Press

July 01, 2008, 6:26PM

LANSING, Mich. (AP) -- A reduction in state aid going to Michigan's public universities has helped spark skyrocketing tuition and threatens to undermine the state's efforts to dramatically boost its number of college graduates.

While state leaders have paid lip service to increasing the state's commitment to college education, they haven't backed it up with significant resources, other than increases in merit scholarships for college-bound Michigan students.

From the 2003 to 2008 fiscal years, average state tax allocations nationally for higher education rose 24.1 percent, according to the annual Grapevine report compiled by Illinois State University faculty. In contrast, Michigan cut its higher education tax support by 5.1 percent during that period. Michigan was the only state with lower aid levels for universities and community colleges than five years ago.

Universities likely will get a 1 percent funding increase from the state in the budget year starting in October, while community colleges will get a 2 percent bump. That's below the 3 percent boost they expected to get just a few weeks ago.

Michigan's 15 state universities have responded to shrinking state funds by raising tuition 35 percent from fall 2004 through fall 2007, based on an enrollment-weighted method reported by The College Board. That's the 8th-highest increase in the nation since the 2004-05 school year and well above the national average of 21 percent.

Students are feeling the pinch.

Travis Carr, a 27-year-old Lansing Community College student, plans to someday attend Central Michigan University to earn a high school teaching degree. But he's finding it tough to get student loans in the ongoing national credit crackdown.

A look at some of the issues affecting public university affordability in Michigan: STATE AID: Michigan has cut public taxpayer aid to universities over the past five years. That puts pressure on universities to raise the costs they charge students. TUITION: The average published price of in-state tuition and fees at a public four-year university for the 2007-08 school year was $8,508 in Michigan and $6,185 nationwide, according to the College Board's Trends in College Pricing. The average Michigan private college charged $16,868 while the nationwide average was $23,712. Public university tuition and fees rose 11 percent in Michigan last year compared to 6 percent at private schools. Room and board and other costs add to the typical college student's bill beyond tuition and fees. FINANCIAL AID: Most students qualify for some sort of financial aid or scholarship grant, meaning they don't pay the actual sticker price of going to college. Despite an overall decline in higher education investment, Michigan has boosted financial aid and scholarships for college-bound students. The expanded Michigan Promise scholarship program, for example, now provides up to $4,000 for students who do well on state standardized tests. Michigan has increased state support for financial aid and grants more than 90 percent in the past five years, the 12th highest increase in the nation, according to the National Association of State Student Grant and Aid Programs. Several Michigan universities also are boosting their financial aid packages, in some cases by larger percentages than their tuition increases. On average, full-time students at public four-year universities nationwide received about $3,600 a year in aid and tax benefits to defray tuition costs. LOANS: College loan debt has doubled in Michigan and across the nation in the last decade. About 60 percent of the students who graduated from Michigan's four-year colleges in 2006 finished with loan debt, according to calculations published by the Project on Student Debt. The average debt per student topped $21,000. The Associated Press

He's working up to 60 hours a week at two different jobs this summer and taking classes part-time -- a tricky time management formula that squeezes him on both ends.

"If you're trying to make money to afford school, you have to spend so much time at work you can't focus on school," Carr said. "But if you cut back your work hours, you don't make enough to go to school."

Michigan's average public four-year college tuition last school year -- $8,508 -- ranked No. 6 nationally. Only Vermont, New Jersey, New Hampshire, Pennsylvania and Illinois had higher average tuition costs.

Michigan's public university tuition increased about 11 percent last year, compared to 6 percent at private colleges. Next year's announced public university tuition increases have been lower but still are exceeding the inflation rate.

There are signs higher tuition is pricing some students out of the market.

A total of 289,475 students were enrolled in Michigan's 15 public universities in fall 2007, up less than 1 percent from the year before and a signal that enrollment growth has slowed in recent years. Enrollment at two-year community colleges, where average tuition was $2,338 last year, has increased much faster.

Education is crucial to income. The U.S. Census Bureau reports that adults with a bachelor's degree earned an average of $54,689 in 2006, compared to $29,448 for those with no more than a high school diploma. Adults with advanced degrees earn four times more than those without a high school diploma.

"At this point, I really don't think a college education is optional," said Chris Mitchell, 22, a junior at Oakland University in suburban Detroit. "If you want to make a decent living, you've got to have at least some kind of degree."

In 2004, Gov. Jennifer Granholm announced she wanted to double Michigan's number of college graduates within a decade -- part of her strategy to boost Michigan's sagging economy. The theory: a better educated work force will help draw cutting-edge jobs to Michigan.

The need for action was clear. As of 2006, about 26 percent of Michigan's population aged 25 and older had at least a bachelor's degree. That's below the national average of about 28 percent and far below the national leader, Massachusetts, where more than 40 percent of people in that age group had a college degree.

But since Granholm made that announcement, she and state lawmakers have cut taxpayer aid to universities. Michigan's sluggish economy has led to lower-than-expected tax revenues, causing years of cuts or the cancellation of spending increases universities thought were coming.

At the same time, the state has had to pour money into prisons and Medicaid, the health care program for low-income residents.

Granholm spokeswoman Liz Boyd said the administration worked during difficult budget years to prevent what she said would have been "draconian cuts" to higher education, and is dedicated now to increasing its investment in universities and community colleges.

But the numbers show Michigan universities continue to get an ever-smaller percentage of their budgets from state aid. Where the typical Michigan public university used to get more than 60 percent of its operating budget from state funds 20 years ago, the amount now is less than 40 percent -- or, in some cases, less than a third.

The link between state aid and tuition rates is evident in several states. Ohio's public universities, for example, have frozen most undergraduate in-state tuition rates for two years in exchange for increased state aid. Average annual tuition last year for an in-state Ohio student at a public university was $8,490.

Tuition rates at Florida's public universities historically have been among the nation's lowest, at an average $3,361 in 2007-8. But Florida lawmakers are cutting state aid this year. Tuition will rise as much as 15 percent for some University of Florida students this fall.

Some universities argue that their annual costs -- heavy on salaries, benefits, technology and utilities -- almost always climb much faster than the general inflation rate. Some schools even use a specially created inflation index and don't like comparisons to the more widely used consumer price index.

But critics say that's nonsense and that universities must do more to control their spending. They argue universities get away with tuition and spending increases above the general inflation rate because lawmakers, and even the families paying the bills, let them off the hook.

"They could contain costs if they wanted to," said Jack McHugh, an analyst with the Mackinac Center for Public Policy, a Midland-based free-market think tank. "It's a sham."

Universities counter that cutting back in the wrong places would undermine the quality of the education they give students.

Michigan State President Lou Anna Simon said the state risks trouble by ignoring investments in higher education that could pave the way for a brighter economy and stronger communities. Other states -- also worried about paying for prisons, Medicaid and other social programs -- have managed to do more for higher education than Michigan.

"They're funding higher education. So why aren't we?" Simon said. "An investment in these kids is an investment in the future. An investment in research pays dividends in the future."