University of Michigan looks to out-of-state students to subsidize low in-state tuition increase
University of Michigan has adopted its lowest in-state tuition increase in three decades — and it's doing so in part by putting an additional cost burden on out-of-state students.
During a public meeting Thursday afternoon, the school's eight-member governing board in a 6-2 vote approved a 1.1 percent increase for underclassmen residents, bringing the in-state rate to $13,142, and a 3.2 percent increase for out-of-staters, bringing the non-resident rate to $40,392 for freshmen and sophomores.
"The people of Michigan have made an investment in the university over a long period of time and I think that creates an equity that makes it fairer to do what we can to make in-state tuition go up at a slower rate than out-of-state," U-M regent Larry Dietch said in an interview. "And the data would indicate, at least at this point, that there is elasticity in terms of the demand from out-of-state and the ability of people to pay."
University of Michigan Regents Laurence B. Deitch and Mark J. Bernstein talk during a regents meeting on Thursday, June 20, 2013 at the Michigan Union.
Melanie Maxwell | AnnArbor.com
The increases follow a 2.8 percent increase for students in state and a 3.5 percent increase for out-of-state students last year. U-M's resident tuition has grown 60.2 percent over the past decade. Its non-resident tuition has increased 55.2 percent.
Even prior to the increase, U-M was one of the most expensive public colleges for out-of-state students. U-M has the second-most expensive sticker price of any public university in Michigan for resident students.
University officials say it's U-M's onus to keep tuition affordable for in-state students whose families' tax payments partially fund the university. U-M will receive $279.1 million next year in state aid. They point to the fact that out-of-state applications are climbing each year and say there are plenty of competitive students who are willing to pay the price for education at the Ann Arbor school.
"Our out-of-state tuition is higher than most publics'," U-M Provost Martha Pollack said during a media briefing on Thursday. Pollack said the school has seen "an explosion" of applications from non-resident students in recent years.
Jennifer Delaney, a higher education funding expert at the University of Illinois, said more and more elite flagship state colleges are taking a similar route.
"The political battles are around in-state students and in-state tuition and one way that institutions can get around that is to raise rates for out-of-state students," she said. "Out-of-state students supposedly don't have that same subsidy. There isn't a political body that protects the out-of-state students."
University of Michigan Provost Martha Pollack chats before the start of a regents meeting on Thursday, June 20, 2013 at the Michigan Union.
The board agreed to grow the school's general fund to $1.72 billion, up 4.6 percent from last year. The growth is possible because of the increase in tuition, cost recovery methods that will save $23.7 million next year and an increase in out-of-state enrollment.
The number of non-resident undergraduates at the school —who pay $27,250 more in tuition than Michigan residents— is anticipated to increase by 0.5 percent in fiscal 2014, according to U-M Provost Martha Pollack. She said the school anticipates that in the fall 60.9 percent of undergraduates will be Michigan residents.
U-M enrolled 42.6 percent of its 2012-13 freshman class from out of state - the largest percentage in recent history. School officials say the growth is due to demographic trends in Michigan — state high schools are producing fewer graduates — and not because of a cash grab for more tuition dollars.
How U-M's does FY 2014 tuition compare to peers?
In-state rates
- University of Virginia: $12,458, up 3.8%
- University of North Carolina: $8,340, up 10.3%
- University of Texas - Austin: $8,878, frozen
- Ohio State University: $10,037, frozen
- University of Maryland: $9,161, up 3%
Out-of-state rates
- University of Virginia: $39,844, up 4.8%
- University of North Carolina: ip $29,905, 6.1 %
- University of Texas - Austin: $16,211, up 2.1%
- Ohio State University: $25,757, up 2%
- University of Maryland: $28,347, up 4%
Regent Mark Bernstein, who was elected to the board in November, said that the model of leveraging out-of-state tuition to keep in-state rates low is a sustainable one.
"[U-M is] using the pricing power that Michigan families and taxpayers have created to increase tuition modestly on out-of-state students while still maintaining the competitiveness and pricing power of this university," he said "Even with this relatively modest out-of-state tuition increase, the university remains a good deal for out-of-state students. ... I hope this is a model we embrace in the future."
If the university does embrace the model, then regents and school officials say U-M also needs to increase aid to low and middle-income families from out-of-state. U-M put $161.2 million of its fiscal 2013-14 general fund toward centrally awarded aid. The school currently meets the demonstrated need — through a combination of grants, loans and scholarships — of all in-state students whose families earn $120,000 or less. For out-of-staters, U-M meets the full need of students from families that earn $40,000 or less (about 400 students).
Most U-M students from out-of-state are wealthy, although the university didn't provide income figures for out-of-state students Thursday. U-M estimates that about 48.7 percent of in-state families make more than $150,000 or do not apply for federal loans.
"We struggle with socioeconomic diversity mightily," Bernstein said. "We're making some progress with Michigan students.... With out-of-state students we have a lot of work to do."
Not all regents agree that the university can viably shift the cost burden of tuition increases to out-of-state students year after year.
"That's been the trend where in order to address these problems, and what I would call an unsustainable model that we have to change in some way, some universities are passing the cost on to the out-of-state student," said Denise Ilitch, a U-M regent who voted against the proposed tuition increases. "But I think that model, over time, is unsustainable as well."
Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
Stuart Brown
Sun, Jun 23, 2013 : 3:39 a.m.
Silly Sally is mostly right! An example of the bloat is the proposed expenditure of $500/sq-ft for the new graduate student dorm when the national cost of construction averages around $200/sq-ft for dorm space. Let's take another example: in 1981, I had just finished my freshman year in Alice Lloyd Dorm ($1100/semester cost) and moved into Michigan House Co-op ($880/semester cost). Fast forward to 2013,
Stuart Brown
Mon, Jun 24, 2013 : 2:55 a.m.
Alice Lloyd should have been torn down and replaced with something that cost about $200-300/sq-ft. At $100K per bed, you equal what the private developers spent for Zargon West (200 beds, $20 Million) which is new construction.
blue85
Sun, Jun 23, 2013 : 8:04 p.m.
Stuart, many of these buildings had not been deeply rehabbed for 50 years. Here is a thought experiment: how would you like 50 years of students to live in your house (high volume and high intensity) without having the funding to do a rehab? What sort of condition would your house be in? Next up, since many of these spaces have additional state/federal mandate for fire suppression and security systems, what would that cost you? Many of these buildings have current generation internet/data ports and wiring...what would that cost you? Many of these buildings must house food services on a large scale. What would that cost? Many of these buildings also have internal instructional space. What should that space cost?
Stuart Brown
Sun, Jun 23, 2013 : 3:59 a.m.
Silly Sally is mostly right! An example of the bloat is the proposed expenditure of $500/sq-ft for the new graduate student dorm when the national cost of construction averages around $200/sq-ft for dorm space. Let's take another example: in 1981, I had just finished my freshman year in Alice Lloyd Dorm ($1100/semester cost then, $2819 now) and moved into Michigan House Co-op ($880/semester cost then, $2255 now). Fast forward to 2013, a room type 4 costs $5000/semester and Michigan House Co-op costs $2408/semester. The ICC's costs are in line with inflation while UofM's dorm costs are well above inflation. Note that UofM Dorms do not pay taxes (ICC does) get generous gifts from alumni (not sure what the ICC gets in this department) and yet they cannot keep their room charges in line with inflation the way the ICC has over the last 32 years. Another note, the U just rehabbed Alice Lloyd at a cost of about $100,000 per bed--the ICC could have provided about double the beds for the same money and in 30 years, the room and board charges would probably still be in line with inflation. The U's got a lot of explaining to do!
Roger Kuhlman
Sat, Jun 22, 2013 : 2:34 p.m.
You keep raising out-of-state tuition and people wonder why UM is dominated by Rich, snobby Young People. They are the only ones from out of state that can afford it. UM has control its bloated cost structure and make college far more affordable for average Americans than it is.
blue85
Sat, Jun 22, 2013 : 3 p.m.
You keep cutting in-state support, starve the U of dollars and then wonder why out of state tuition is raised? Out of state tuition can be raised because the U is a good value proposition, but don't count on that continuing if cuts continue. That out of state money subsidizes the other 2/3rds of the class which comes from in-state. You are right to resent your rich cousins from other states for paying for your kids to go to school because you are too cheap to support your local school. I imagine that your comment is a natural reaction to the humiliation which your fiscal inadequacies cause you to evince. Resentment of the success of others is a natural human emotion; a more productive reaction might be to return the state to its former fiscal glory and restore your own sense of self worth in the process.
talker
Sat, Jun 22, 2013 : 5:55 a.m.
As the cost of tuition has increased over the years, a 1.1% increase now could be much higher in dollars than a 3% increase was several years ago. Using percents instead of actual dollars masks real costs.
blue85
Sat, Jun 22, 2013 : 2:55 p.m.
Wrong: 1) using percentages creates a normalization of the basis; 2) normalization allows one to compare dollars across many categories; 3) normalization allows the comparison of one times series to another without using a lot of decimals, dollar signs and other symbols; 4) normalization is one of the first basic steps in forming a statistical comparison; 5) having done those comparisons, it is easy for individuals with different dollar bases to convert into dollars as required.
Mike
Fri, Jun 21, 2013 : 7:45 p.m.
The University of Michigan is becoming less and less the University of Michigan..................
cnyumfan
Fri, Jun 21, 2013 : 7:07 p.m.
Disappointing is the fact that out-of-state students will keep paying more and more. However, more disappointing is the tone, tenor and characterization of non-Michigan residents who wish to attend one of the best educational institutions in the world. I can tell you for a fact that I am not a millionaire not even remotely close to one either. However, my wife and I sent our child there 7 years ago. He graduated Magna Cum Laude, led the MMB drumline and did not trash any dorm rooms, apartments or houses! I believe that he added a great deal of value to your great state and university. By the way, he is now very well employed and contributing as a taxpayer to, wait for it, the state of Michigan. So, cut the crap, the hyperbole and the misrepresentation of what I have personally witnessed to be great additions to the University of Michigan - The out-of -state student body!
blue85
Sat, Jun 22, 2013 : 2:51 p.m.
Ignore the haters: 1) they didn't get into UM; and/or; 2) they are incredibly bad at basic math and basic accounting; 3) they have come to fear life and/or they are jealous of the success of others. Gore Vidal: "Every time a friend of mine achieves something, a little something inside me dies." Many of the frequent fliers in the hate UM zone are folks who are channeling Gore Vidal. Thanks for participating in UM tradition...it isn't always easy.
EyeHeartA2
Fri, Jun 21, 2013 : 5:26 p.m.
I was with you until this: "How U-M's does FY 2014 tuition compare to peers? Ohio State University: $10,037, frozen" OSU, UM, peers? Same sentence?
justcary
Fri, Jun 21, 2013 : 4:41 p.m.
I graduated from UM exactly thirty years ago. Get ready to weep: On my CRISP printout, a third of a sheet of dot-impact computer paper with my schedule, the semester tuition was THREE DIGITS until senior year when it cracked a grand per semester. Even though there were well-off students then, we all competed for the same housing and such. I feel there was not a polarization of students then that there clearly is now: at one end, affluent students, whose parents purchase luxury condominiums in town and who drive around in luxury cars; at the other, the archetypal starving student with a bike.
EyeHeartA2
Fri, Jun 21, 2013 : 5:30 p.m.
You had blinders on. The UM students were shocking rich when I arrived here about 30 years ago. To the point of ridiculous. Maybe you hung out with a less affluent crowd and didn't care about the sorority girls or whatever. It has been like this since forever.
justcary
Fri, Jun 21, 2013 : 4:42 p.m.
To finish my thought, this tuition policy, while fair to Michigan residents, will probably drive that polarization.
Beth
Fri, Jun 21, 2013 : 2:28 p.m.
Wow, there's a lot of hate here for out-of-state students and families! I was an out-of-state student at the UM long ago - my parents and grandparents were from here and went to UM, and it's where I'd always wanted to attend as well. We were FAR from being millionaires - I couldn't have come without the aid of several scholarships and some careful saving and taking out a second mortgage by my parents. There is no way I could have attended if the tuition rates were as high as they currently are. Maybe more wealthy out-of-state students are now applying because they're the only ones who can afford the tuition? I'm not sure my own children will even be able to afford in-state tuition, and there's certainly no way their out-of-state cousins will be able to pay. Yes, Michigan is a state school - it should (and does) admit lots of in-state students. But it's the large numbers of out-of-state and international students that help contribute to Michigan's excellent reputation. I grew up in New York state, where the many state universities are primarily attended by in-state students. Anyone heard of SUNY Fredonia?.......
A Voice of Reason
Fri, Jun 21, 2013 : 2:11 p.m.
University of Virginia has 69% in-state students which is mandated by state law. U of M has 60%. University of Virginia is $1400 less than the University of Michigan for in-state students and $1000 less for out of state students. State of Virginia has 1,000,000 less people than Michigan. The cost of living is higher in Charlottesville, VA than Ann Arbor: http://www.areavibes.com/cost-of-living-calculator/ann+arbor,+mi-vs-charlottesville,+va/ Please tell me if I am missing the true justification for the boards' argument about raising tuition for out-of-state students or increasing the number of out-of-state students. Seems like there is a spending problem at U of M.
blue85
Sun, Jun 23, 2013 : 8 p.m.
" Sounds to me like UVA has better priorities from the point of view of providing higher quality instruction." Priorities for whom? Schools are chosen based on "fit" not on finding an institution which is right in all ways for all things. People like to quote USN&WR for figures: do you think their #6 national ranking for undergraduate teaching should/will lead to disappointment? UVA's Sullivan admitted the university was resting on its laurels and is over-rated? Do you know better than the insitution's President? "While I am grateful to blue85 for revealing the thinking of the top leadership of UofM," I don't work for UM, so, as a factual matter, this is unintentionally or intentionally misleading. "I continue to remain appalled at the total disregard for the needs of the major stakeholders--students, families and residents of the State of Michan." The payscale website shows UM second nationally for post-graduation income; UM is a major feeder to elite graduate schools. I suspect many stakeholders a you put are very happy with the product. The state of Michigan is almost irrelevant and gets better than it deserves: it is funding at the level of Mississippi but getting a California product. "To me, the expensive research items amount to corporate welfare or socialism for the rich; make the direct beneficiaries of these things pay for them, not undergraduates and their families." Appallingly short sighted: the research that comes out of the U has changed the past and will change the future, and you've been a direct or indirect beneficiary. Did you or your children ever receive the Salk vaccine? There are hundreds of such examples which might be adduced. "Another thing not mentioned by blue85 is that UofM has a $7 Billion endowment that throws off $280 Million/year in revenue to the U to make up for the loss of state funding -- UofM certainly has a spending problem." As almost everybody
blue85
Sun, Jun 23, 2013 : 7:53 p.m.
"blue85's comment, "3) UVA is, relative to Michigan, a boutique in the research domain; it costs a lot of money to run 11 wind tunnels and electron beam laboratories and cutting-edge lasers;" is revealing. First, most undergraduates at UofM will never receive any benefit whatsoever from 11 wind tunnels, electron beam laboratories or cutting-edge lasers" The university doesn't pretend to offer customer pricing at the customer level. The university also, by substitution effect, averages the costs of its operations over all disciplines and all students. Students have to shop at the front end for a school which teaches what they want and offers a price they can accept. That is why there are LACs and research institutions. Students understand this, so why don't you? Do you go to a truck store to buy a submarine? Lastly, students attend for "reputation" and reputation is enhanced by the facilities mentioned. ", but according to blue85 it is not only right but necessary that these undergraduates and their families pay for these things." See foregoing comments. I think your expectations are unrealistic. I think there are something like 4,000 schools and colleges in this country and students are free to shop for and buy a package of attributes.
blue85
Sun, Jun 23, 2013 : 7:49 p.m.
"The smoke and mirrors comes in how the administration juggles in-state, out-state and enrollments...." The rates of admission allow increases in rates of revenue to offset increases in expenses. The university doesn't set the marginal cost for any of its expenses: it can buy or not buy; it can bargain or not bargain for bulk items; in no case does it set the price. "to be able to claim that they have held down in-state tuition when they have not kept down the constate rate of increase in expense. " This makes no sense for the reasons noted above. "That is why I am saying the public needs to keep an eye on the expenses not which source of revenue is used to pay the expenses." For this to be useful: 1) the public would have to understand the pricing structure of tens of thousands of items; 2) the public would have to be able to meaningfully intervene with factor produces and be able to negotiate contracts for purchase; 3) the public would have to irrationally expect that their oversight would somehow control factor production and that their ability to monitor and control the factor prices exceeded current university expertise. I consider all of those suggested/implied courses of action to be incredibly wishful thinking.
blue85
Sun, Jun 23, 2013 : 7:45 p.m.
"@blue85- The General fund budget refers to the planned expenses, while the state appropriation is a source of revenue. The source of revenue does not affect the expenses side of the ledger. " This is so wrong it is not even false: debits and credits are always matched off by category (unit) and by function. "As I said, the decrease in state appropriation will affect the rate of tuition increase but it won't affect the expenses." Utterly false: were revenues and expenses not matched, the university could/would spend to infinity and beyond. There is always a matching process. I suspect you've never assembled a budget, certainly not a $6Bn budget. "The expenses have gone up at a steady pace about twice the rate of inflation for decades." A nearly perfect predictor of the increase in tuition has been the increase in inflation plus a shortfall recovery rate for state funding. The sum of the two equates fairly precisely to the increase in tuition. Of course, tuition is not the only revenue to the university. Which of the thousands of the U's expenses are you the most familiar with? Let's discuss them. "Whether the revenue comes from tuition or state appropriations has varied, so the tuition increases have varied more than the expenses." This is a logical and mathematical non sequitor: variance is volatility; variance in expenses varies by product producer; variance in revenue is a function of source (tuition, state, federal, fee). While there is an attempt to match these figures, the underlying economic/stochastic driver doesn't vary by which category there are put in. If I buy/sell a paper cup, there is a bid/offer price. The price varies, but not the volatility of the price.
Stuart Brown
Sun, Jun 23, 2013 : 6:10 p.m.
blue85's comment, "3) UVA is, relative to Michigan, a boutique in the research domain; it costs a lot of money to run 11 wind tunnels and electron beam laboratories and cutting-edge lasers;" is revealing. First, most undergraduates at UofM will never receive any benefit whatsoever from 11 wind tunnels, electron beam laboratories or cutting-edge lasers, but according to blue85 it is not only right but necessary that these undergraduates and their families pay for these things. Sounds to me like UVA has better priorities from the point of view of providing higher quality instruction. While I am grateful to blue85 for revealing the thinking of the top leadership of UofM, I continue to remain appalled at the total disregard for the needs of the major stakeholders--students, families and residents of the State of Michigan. To me, the expensive research items amount to corporate welfare or socialism for the rich; make the direct beneficiaries of these things pay for them, not undergraduates and their families. Another thing not mentioned by blue85 is that UofM has a $7 Billion endowment that throws off $280 Million/year in revenue to the U to make up for the loss of state funding -- UofM certainly has a spending problem.
Stuart Brown
Sun, Jun 23, 2013 : 5:46 p.m.
tresspass, The ICC is a non-profit that does pay local property taxes, unlike the dorms owned by UofM.
trespass
Sat, Jun 22, 2013 : 11:12 p.m.
@snark12- private colleges are still non-profits so they are still tax exempt.
trespass
Sat, Jun 22, 2013 : 11:11 p.m.
@blue85- The General fund budget refers to the planned expenses, while the state appropriation is a source of revenue. The source of revenue does not affect the expenses side of the ledger. As I said, the decrease in state appropriation will affect the rate of tuition increase but it won't affect the expenses. The expenses have gone up at a steady pace about twice the rate of inflation for decades. Whether the revenue comes from tuition or state appropriations has varied, so the tuition increases have varied more than the expenses. The smoke and mirrors comes in how the administration juggles in-state, out-state and enrollments to be able to claim that they have held down in-state tuition when they have not kept down the constate rate of increase in expense. That is why I am saying the public needs to keep an eye on the expenses not which source of revenue is used to pay the expenses.
snark12
Sat, Jun 22, 2013 : 9:10 p.m.
What would be the U's annual tax bill to the city if it went private? Any estimate?
blue85
Sat, Jun 22, 2013 : 2:48 p.m.
"@blue85- I don't know why you think the state appropriation has anything to do with the rate increase in the General Fund budget. It may affect tuition increases but not the budget." So help me out: tuition is revenue, revenue in a not for profit is matched to expenses, so tuition/revenue and expenses are both part of the budget, the budget is set with a forecast of state aid to be received. So how can you believe/think that the state appropriation does not affect the budget: of necessity, it affects the revenue side (tuition to be received); of necessity to the extent a forecasted shortfall is anticipated, it must be a driver of tuition. "I think 2.5% is a bit generous for the inflation rate. It has been closer to 2%." Categorically not: long run inflation in the US has run at 3.25% over the last 100 years. Over the last 10 years, it has run roughly 2.25% in CPI, and roughly 2.75% in HEPI. I've published these figures on other AApage articles about UM. Annarbor.com has published many figures that allow the number to be inferred. The Google links I've provided support the figure which I've used. "Just look at the wage increases for UM staff. The budget has been increasing at abput 2 times inflation for decades and this year is no different." Inflation is roughly 2.25-2.50% and the compound DECREASE in state funding is 3.01% over the last decade. The net effect is a shortfall of roughly 5.5% per annum in the U's ability to fund itself. These facts are indisputable. With inflation at the 2.25%, increases are double inflation, but you are aren't taking cognizance of the revenue gap. "They disguised the increase by accepting more out of state students in order to keep the in state tuition increase artificially low. That is not a long term solution." I agree, the state has, de facto, forced the U to privatize. The U should cut ties with the state.
trespass
Sat, Jun 22, 2013 : 4:01 a.m.
@blue85- I don't know why you think the state appropriation has anything to do with the rate increase in the General Fund budget. It may affect tuition increases but not the budget. I think 2.5% is a bit generous for the inflation rate. It has been closer to 2%. Just look at the wage increases for UM staff. The budget has been increasing at abput 2 times inflation for decades and this year is no different. They disguised the increase by accepting more out of state students in order to keep the in state tuition increase artificially low. That is not a long term solution. The long term solution is to only let the budget increase at the rate of inflation or hopefully less.
blue85
Fri, Jun 21, 2013 : 2:37 p.m.
Easy answers: 1) inflation over the last ten years has run at roughly 2.5%/year; state support has declined at the rate of almost exactly 3%/year. Tuition at UM has been increasing at almost exactly the compound sum of those components; 2) As Sullivan at UVA noted (and she has a solid comparative basis to UM, having worked at UM), UVA is over-ranked in many areas and has been resting on its laurels; 3) UVA is, relative to Michigan, a boutique in the research domain; it costs a lot of money to run 11 wind tunnels and electron beam laboratories and cutting-edge lasers; 4) UVA has nothing like UM's rankings at the graduate level, so despite the ranking at USN&WR which penalizes EVERY large school and which doesn't recognize Michigan's #6 undergraduate teaching ranking, UVA simply isn't the same beast that Michigan is and your anecdotal "explanation" is pretty shallow relative to the thousands of lines in each budget book. Those budget books get published on a public site and I've browsed through them...there is a lot of complexity there, and that complexity is AFTER analysis/decisions...thus highly digested. Give them a gander and you'll see that your "analysis" doesn't quite cut it.
A Voice of Reason
Fri, Jun 21, 2013 : 2:14 p.m.
and the justification that there are not enough talented students in Michigan. Virginia solves the problem within their state and educated their residents so they can attend a top school. Michigan's education school isn't even producing teachers capable of educating the next generation (according to the Wallstreet Journal).
A Voice of Reason
Fri, Jun 21, 2013 : 2:12 p.m.
And Virginia is ranked higher than Michigan in US News and Reports.
sweet_life
Fri, Jun 21, 2013 : 1:15 p.m.
The article states " U-M has the second-most expensive sticker price of any public university in Michigan for resident students." I thought it continues to be the most expensive public school in Michigan. Can you clarify?
ElConquistador
Fri, Jun 21, 2013 : 2:03 p.m.
*Michigan Technological University is what you meant
Kellie Woodhouse
Fri, Jun 21, 2013 : 1:33 p.m.
Michigan Technical University charges in-state tuition of $13,470.
JGA2trueblue
Fri, Jun 21, 2013 : 1:07 p.m.
"The people of Michigan have made an investment in the university over a long period of time..." The out-of-state students at the U are from one of the two the entitlement groups. Wealthy, spoiled kids, whose parents do not care what it costs or how their child acts at school. I have seen sororities at M the end of the school year that makes stomachs turn. Filthy, damaged and just leaving clothing, printers, rotten food, etc. - whatever they cannot pack in their expensive SUVs to travel out-of-state. Only one example of this generation's DNA. The second entitled group is the foreign student who do NOT for any reason stay in Michigan or the US. It is an insult to the state and our country to label this as "diversity" when they do NOT stay and do not invest. "School officials say the growth is due to demographic trends in Michigan — state high schools are producing fewer graduates — and not because of a cash grab for more tuition dollars." Can the U please provide PROOF of these trends? Just stating it means absolutely nothing. This university needs to address and control the salaries of the deans, professors and review the waste of useless classes that have useless, biased academia. If the U did not increase tuition at all, they would not suffer. THAT is a fact.
Angry Moderate
Fri, Jun 21, 2013 : 3:04 p.m.
Why on earth would anyone want to stay in Michigan surrounded by people generalizing their entire generation as "entitled" and "spoiled"? Just because they want to move back to their home country where their family lives? They pay $100,000 for their education, it's not like they owe us something more and have to stay here forever.
trespass
Fri, Jun 21, 2013 : 1:04 p.m.
The UM Public Relations Department is leading the reporter around by the nose, in order to make the story about in-state vs out-state tuition. That is all smoke and mirrors. You need to keep your eye on the budget. It is still increasing at 2 to 3 times inflation. Why? Someone needs to take a close look at the budget and what is driving increases in costs. My strong suspicion is that it is a combination of higher administrative costs, indirect costs of recruiting faculty who have federal grants and building monuments to President Coleman at $553 million per year. Bernstein and Diggs ran on platforms that they were going to be budget hawks but they voted for a 4.6% increase once again. No one should vote for an incumbent Regent until that changes.
Barzoom
Fri, Jun 21, 2013 : 1:04 p.m.
Sorry, too many states.
Barzoom
Fri, Jun 21, 2013 : 1:03 p.m.
This will mean that fewer in-state students will be accepted. The University will be able to generate more revenue from the out of state state students. Therefore, that's where their priority will be.
justcary
Fri, Jun 21, 2013 : 4:32 p.m.
You're probably incorrect. State colleges and universities have in-state quotas to meet to qualify as a state institution.
Ms1215919
Fri, Jun 21, 2013 : 1:28 p.m.
......Always has been their priority.....
joejoeblow
Fri, Jun 21, 2013 : 12:52 p.m.
I've never understood why people are willing to pay so much for undergraduate degrees. You could go to any college for undergrad, then go to a higher end U for grad school and come out much further ahead. In today's world, your undergraduate degree matters little, so why pay a fortune for it.
fordprefect
Fri, Jun 21, 2013 : 4 p.m.
That's largely true, but it really depends on what you're planning to do. For example, as an engineer, here, you're not really paying for an education that's vastly superior to those from other undergraduate institutions. You're paying for the the connections you make and the "brand," so to speak. Lots of companies don't want to spend to send reps to career fairs at every decent university in the country, so they send them to the so called "higher tier" universities and recruit there, first. Being at a Michigan, and MIT, or a Cal-Berkeley makes it easier to get your foot in the door. I'm not necessarily saying that's worth the price. I think it's not universally true that your undergraduate degree doesn't count for anything, though.
aslick
Fri, Jun 21, 2013 : 2:32 p.m.
As I get further into my career I see how this is totally true. You can get grad school paid for if you are a kick butt undergrad student. Go to community college for two years, transfer to a 4 year, kick butt at the last 2 years, and get grad school paid for with far less undergrad debt.
aslick
Fri, Jun 21, 2013 : 12:34 p.m.
Unreal. 10 years ago when I started at U of M it was 25k a year for out of state. I graduated when it was around 30k a year. 40k a year?! Holy crap. No wonder kids are graduating with lifelong debt from college. Is the investment worth it? I would say it is only if you are in a major that has good value after school. Holy cow.
Angry Moderate
Fri, Jun 21, 2013 : 2:57 p.m.
It's absolutely not worth it for the vast majority of students who are getting a 2.5 GPA in BS like communications and sociology and whatever else they're teaching now.
Milton Shift
Fri, Jun 21, 2013 : 1:38 p.m.
Yep, throw in the fees that stack on top of tuition, cost of living (40k does not cover room and board, only tuition), and interest, and you're at $250,000 in debt after 4 years, minimum. 7% of that is $17,500. Have fun cutting a check for $1500/month for interest alone for the rest of your life...
a2citizen
Fri, Jun 21, 2013 : 12:43 p.m.
The US banking/financial system is counting on that lifelong debt. It's a revenue stream that students can never default on.
Estate
Fri, Jun 21, 2013 : 12:12 p.m.
Out-of-state students come from multi-millionaire families, so why any hesitation on increasing their tuition rates? In addition, their parents usually purchase a house or a condo here in addition so they won't have to stay in a dormitory or share an apartment with others. They'll just pay it without even blinking an eye. An increase in tuition means nothing to these wealthy students and their families.
trespass
Fri, Jun 21, 2013 : 3:25 p.m.
@Matt- more than 50% of the graduate students in STEM fields are not only out of state but out of country, with the largest group coming from China. Why are federal taxpayers paying to educate foreign citizens instead of Americans? Also, the Regents approved a new policy last year that mandates continuous enrollment for graduate students. The past practice was to allow graduate students who were not taking any classes but simply working in research laboratories to discontinue ernollment until it was time for their thesis defense and graduation. The conitnuous enrollment policy was the way the University could charge federal grants for more tuition, even though the students were not taking any classes.
blue85
Fri, Jun 21, 2013 : 2:28 p.m.
"Out-of-state students come from multi-millionaire families, so why any hesitation on increasing their tuition rates?" Economics 101 will explain to you the elasticity of demand concept: if you raise the price, demand will fall. More than 80% of current applications come from out of state. Increasing the tuition level without regard to market forces would make less than zero sense. Part of the university's expertise is understanding both their cost structure (to maintain quality of product offered) and pricing (the tuition, which is the cost, to students, of their key input or revenue driver). I seriously doubt that any group of 10 pundits on this board can offer marginal expertise to the literally hundreds of people who do the budgeting/costing/pricing work at UM. People seem to hate success, but UM is ranked #1 in the country for teaching higher education administration and I'm sure there is a connection with the institution's management. It didn't attain global rankings via some sort of divine accident, but by the application of practices that make it a model for nearly every public school in the US and, increasingly, abroad.
sHa
Fri, Jun 21, 2013 : 1:49 p.m.
If they are that "desperate", perhaps they should stay in their own state to attend school.
Matt
Fri, Jun 21, 2013 : 1:47 p.m.
No, not graduate students that are funded by federal grants. When PhD students come in from out of state (which most of them do), if they're on a federal grant, they have to pay the out of state tuition until that student advances to candidacy. That means less money from the grant to do other things, like buying equipment. So in principle you could be hurting some of the research side of the university, as faculty may decide they can't bring in new talent since they can't afford it.
Milton Shift
Fri, Jun 21, 2013 : 1:36 p.m.
Not everyone from out-of-state is rich. And those who are not sink desperately deep into debt.
trespass
Fri, Jun 21, 2013 : 1:08 p.m.
One of those in-state students is the Daughter of Regent Richner. He commented during his campaign about the tuition he was paying but he had plenty of money to pay it. Maybe we should elect some working class Regents who care about whether or not families can afford to go to UM.
Silly Sally
Fri, Jun 21, 2013 : 12:29 p.m.
They will when UM charges such high tuition.
Silly Sally
Fri, Jun 21, 2013 : 11:56 a.m.
" School officials say the growth is due to demographic trends in Michigan — state high schools are producing fewer graduates" So, they could still admit Michigan students, even fill the U. Of course it is a money grab, for their higher tuition
blue85
Fri, Jun 21, 2013 : 2:23 p.m.
Utterly false: 1) UM's in state yield is 70%: for every 100 students offered, 30 students turn down UM. In the current class, that amounts to 1,600 seats; 2) of the 46,700 applications received, only 10,000 or so were from in-state; you can't get in if you don't apply. Michigan is still an absolutely tremendous bargain. 3) filling UM with a class of Michigan students only would require offering acceptances to 15,000 kids (given current yield)...tough to do from 10,000 applications; admitting a purely Michigan class would dilute the credentials/scores and lead, over time, to a lower ranking...which would be a self-defeating strategy; 4) out of state students paying $28,000 more than in-state students effectively subsidizes the Michigan kids that do get in. In sum, you are wrong.
Silly Sally
Fri, Jun 21, 2013 : 10:55 a.m.
What is the increase for juniors and seniors? This is not clear in this article at all. Why raise rates even more for those out of state? why not CONTROL the tuition increases? And for that matter, the cost of the dorms? When I was college age, one could actually work their way through a public university. This is no longer true. Dorms are too fancy, tuition is much too high, bloated staffs, poor state support. So sad, and not silly.
Stuart Brown
Sun, Jun 23, 2013 : 4:12 a.m.
Ignatz, how about $500/sq-ft for the new graduate housing? At $500/sq-ft, a 2000 sq-ft home in Ann Arbor would cost $1,000,000! I can assure you, the private dorms with the nice amenities are not spending $500/sq-ft for construction costs since you cannot make the economics work by simply collecting market rents. Even at 3%, the P/I payment on $1,000,000 is $3400/month with a 20% down payment on the mortgage.
snark12
Sat, Jun 22, 2013 : 4:33 p.m.
Tuition and the state are only two sources of money. I believe donations to the U are up, which is a big part of the building and infrastructure boom.
Matt
Fri, Jun 21, 2013 : 4:52 p.m.
I certainly hope they're spending more than ever before considering inflation.
Angry Moderate
Fri, Jun 21, 2013 : 2:52 p.m.
Matt, the university is spending way, way, way more than it ever has in the past. Costs have gone up regardless of whether they are paid for with tuition or tax dollars.
Matt
Fri, Jun 21, 2013 : 1:45 p.m.
The costs of tuition are separate from housing. It's an extra $10k on top of the tuition to pay for the dorm, but the tuition itself does not go to the dorm. Staff changes alone could not be responsible for a 60% increase in tuition. The real culprit is the myriad of university construction projects that it feels it needs to remain globally competitive as a research institution. On North Campus they just renovated the Phoenix Lab and they're laying down a new mechanical engineering building. On Central they're making renovations to West Hall and moving other things around. That's where the increased costs come from, but the #1 reason tuition is so high is because the state slashed funding so aggressively all these years. We have a balanced state budget now, but UMich tuition has gone through the roof. That was a direct consequence of slashing state funding that everyone should have been aware of when they made those decisions.
Silly Sally
Fri, Jun 21, 2013 : 11:52 a.m.
I was not referring to bloated dorm staffs. Just the cost. 30 plus years ago dorms cost less than $2,000 a year for room and board, perhaps $5,000 in today's money. Food was good, but not 5 star hotel. The staffs that are bloated are not the dorms staff but throughout the U. They exist everywhere and are paid real money that comes from somewhere. There are "compliance officers" to the new position of public safety safety, a new position on top of the UM Police chief. It all add up to higher tuition and higher student loans.
Ignatz
Fri, Jun 21, 2013 : 11:25 a.m.
Sally, Upon what do you base your assertions of dorms being too fancy and bloated staffs? The U is competing with these new private dorms and the increased demand for amenities, such as internet access and better climate control. Staffs have been cut over the years, as well. The students that these staffs take care of are less willing to do for themselves, so someone must keep the places clean and running.