University of Michigan raises tuition 6.7 percent after $47.5 million drop in state funding
Tuition and fees to attend the University of Michigan in fall 2011 will increase 6.7 percent for in-state undergraduate students and 4.9 percent for out-of-state students, under a budget the Board of Regents passed Thursday.
The university will take a $47.5 million cut in funding from the state for the coming school year, the largest in the school’s history. In-state freshmen and sophomores will pay $797 more in tuition next year, while out-of-state underclassmen will pay $1,781 more. Tuition increases will raise $46.4 million in new revenue next year.
University of Michigan President Mary Sue Coleman presents 2011-12 budgets at the Board of Regents meeting on Thursday in Ann Arbor.
Melanie Maxwell | AnnArbor.com
Despite the tuition increase, the university is investing about $9.2 million more in financial aid for the 2011-12 school year.
The $47.5 million cut to the Ann Arbor campus general fund will also result in layoffs and the elimination and downsizing of various centers and institutes at the university, said Provost Phil Hanlon.
But university President Mary Sue Coleman said cuts in the university’s budget and the increase in tuition will not affect U-M’s quality of education.
“This generation of students expects their Michigan education to be the same quality and deliver the same positive impact in their lives as all those who have come before,” she said in a statement. “Our job is to deliver on that promise.”
Hanlon said the university is raising out-of-state tuition by a lower percentage than in-state tuition because officials want to ensure students from a variety of socio-economic backgrounds outside Michigan are able to attend the university. He said the school is able to meet the needs of many in-state students through financial aid but cannot do the same for out-of-state students.
“It’s really driven by quality considerations and what we want to do is construct the highest quality class we can that’s based along multiple dimensions,” he said. “It’s not just grade point average and test scores; there’s lots of different considerations.”
Despite the cut in the state appropriation, the the general operating budget for the Ann Arbor campus will still be slightly larger than last year, about $1.6 billion. Last year's budget was about $1.55 billion. The entire University of Michigan system has a combined budget of $6.1 billion.
Regents approved the budget with a 6-2 vote, with regents Lawrence Deitch and Denise Illitch dissenting.
Deitch spoke about his concern that the percentage of tuition hike was too high for Michigan residents. He said his concern was for the Michigan families that might not qualify for financial aid but are still not doing well enough to totally absorb the tuition hike.
He said the university should do all it can to help Michigan students ahead of out-of-state students.
“This is a vote that says, ‘When in doubt, the benefit goes to Michigan people,’” he said.
Other regents supported the decision to raise tuition for a variety of reasons.
Regent Julia Darlow said the financial aid portion of the budget was appealing to her because families who are making $80,000 or less would pay less than in 2004 because total financial aid awarded would be a record $137 million.
She said Michigan students who are from families making less than $80,000 per year would be insulated from the tuition increase.
“Every student with need who has been getting aid will not be financially impacted by this increase, and will in fact be better of this year than in past years,” she said.
Regent Andrea Newman said she supported the incrase in tuition to help fill the gap left by the decrease in state funding.
“The budget cuts passed by the legislature are impossible to make up otherwise,” she said.
Eli Gurfinkel | The Ann Arbor News
“We’ve been asking every center and institute to give a description of their mission and how they measure success toward their mission and what metrics they use to evaluate that,” he said. “We’re looking at everyone very carefully. We’re asking what are their most essential functions and whether those essential functions can be accomplished in some other way.”
Despite the closings of centers and anticipated layoffs, approximately $9 million will be spent on faculty salary increases and promotions in 2011-12, and $8 million will be spent on staff salary increases and promotions. In addition, 150 new faculty positions will be added in 2011-12. Hanlon said the money for those positions was in the 2010-11 budget and will carry over to 2011-12.
Hanlon said he wasn't sure how many positions would be cut, but layoffs will be necessary. The numbers will be determined by each individual school and college at the university now that regents have approved the budget.
"We don't have an exact count of that because that part of the budget reduction is part of the reduction of unit budgets and we don't have the complete information of what they do at their end," he said.
Kyle Feldscher covers K-12 education for AnnArbor.com. He can be reached at kylefeldscher@annarbor.com or you can follow him on Twitter.
Comments
Greggy_D
Fri, Jun 17, 2011 : 4:16 p.m.
Look at UM's tuition increase history: <a href="http://sitemaker.umich.edu/obpinfo/files/umaa_tuitfee_history.pdf" rel='nofollow'>http://sitemaker.umich.edu/obpinfo/files/umaa_tuitfee_history.pdf</a> You see even LARGER percentage increases when State funding WASN'T cut. Stop trying to blame Snyder and put the blame where it squarely belongs.....on the University of Michgan.
1bit
Fri, Jun 17, 2011 : 10:05 p.m.
John B: You should read trespass' comment above to see why you are incorrect in your assertion.
John B.
Fri, Jun 17, 2011 : 7:44 p.m.
Nice try, but Snyder took away $47.5 Million. The tuition increases will replace $46.4 Million of that. Easy to see.
Cash
Fri, Jun 17, 2011 : 4:14 p.m.
And yet...Michigan State University raised the non-Michigan tuition rate more than the Michigan student rate. That sends a much nicer message to Michigan taxpayers.
lefty
Fri, Jun 17, 2011 : 2:23 p.m.
Reinvent Michigan! Remember who you vote for in Nov.
grye
Fri, Jun 17, 2011 : 2:07 p.m.
If public school teachers are in the classroom teaching 6 classes a day, why can't the U of M professors be required to do the same? Double/triple the number of courses taught. Decrease the staff my half. Just think of the savings!
macjont
Fri, Jun 17, 2011 : 3:32 p.m.
grye, you are mixing apples and oranges. At U of M, profs are expected to do research and publish and it is a very large part of their job. I agree, however, that public school teachers are overworked and underpaid.
grye
Fri, Jun 17, 2011 : 2:03 p.m.
Maybe the U of M should change their structure to become completely profitable. Get rid of all the academic programs except for general studies and underwater basket weaving. Keep the football program (the athletes only need the programs left over). Think of the profits!
EyeHeartA2
Fri, Jun 17, 2011 : 1:48 p.m.
6.7%, that matches up pretty good with the raise I got last year.....wait, I go 0%. Never mind.
macjont
Fri, Jun 17, 2011 : 1:09 p.m.
How much it costs to get a Michigan degree, standing alone, is not the problem. A combination of savings, loans and part-time work will suffice. Unfortunately, the result tends more and more to be a very large debt needing sound post graduation employment for repayment. Unless we have an economy that will employ our graduates at incomes justifying this debt, our young people face a bleak future. And this is true even with many of the degrees once thought to be of the highest value, including many of those granted by the University of Michigan.
Dog Guy
Fri, Jun 17, 2011 : 1 p.m.
When buying a degree as when buying real estate, the price is determined by location, location, and location.
Rork Kuick
Fri, Jun 17, 2011 : 12:58 p.m.
47.5 Million cut to be offset by 46.4 million in extra tuition. And some folks expected a different result? It was the guaranteed outcome of budget cuts by the state government, which we, the voters, control (poorly, Tocqueville would add). They are actually being kind of nice, since by rights, much more of the increase could have fallen to the in state students. For each extra dollar the state gives the U, they can reduce the take from in state students by one dollar. Get it?
Bogie
Fri, Jun 17, 2011 : 12:46 p.m.
There seems to be alot of chatter about the poor being forced out of colleges. In reality, doesn't the poor get to go to college for free? My father had to pay for all four of his children to go to college. He debt level was low, and his income was middle class. He used to joke, that he should have bought one of those monster houses, so we could get financial aid. I just wish people would stop using "class warfare" as an argument. It is time, to put the pressure on the University presidents; mayors; township supervisors; and councils, to find ways to be more efficient. Having the pleasure of living in other states, I can tell you; Michigan is one of most inefficient states, in the country. Consequently, we have to compete with these other states.
InsideTheHall
Fri, Jun 17, 2011 : 12:30 p.m.
Where is the student outrage??????? UM continues to live in la la land. How about a 3% across the board pay cut. Just look at the salaries almost 3,000 making over a $125K. <a href="http://data.michigandaily.com/tmdsal?dept=&fte_op=%3E%3D" rel='nofollow'>http://data.michigandaily.com/tmdsal?dept=&fte_op=%3E%3D</a>&fte[value]=125%2C000.00&fte[min]=&fte[max]=&title=&campus=UM_ANN-ARBOR&Year[0]=2010&fname=&lname= Don't blame the governor, blame the higher education culture that has fleeced the student, parent, and taxpayer. Excuse me, my Prius car pool ride has arrived and we need to make a quick stop @ Starbucks.
macjont
Fri, Jun 17, 2011 : 3:34 p.m.
Shallow? I don't think so. Seems to be sound economics to me.
InsideTheHall
Fri, Jun 17, 2011 : 3:20 p.m.
That is a shallow argument. How about a litmus test? Take 30 Profs and give em a 10% shave and a haircut. Let's see how many decide to leave for "greener" pastures. Hmmmm, 10% cut and move to Berkley, NYU, Columbia, Harvard. The cost of living is worth 20% as Ann Arbor is cheap compared to other locations of elite schools.
macjont
Fri, Jun 17, 2011 : 12:47 p.m.
If one wants a great university, one must pay competitively --- not only with other great universities, but also with private sector employers bidding for the services of the same employees.
snoopdog
Fri, Jun 17, 2011 : 12:23 p.m.
Raise tuition for out of state students 1.8% less than in state students , ridiculous ! Out of state students have parents that can afford to pay whatever it costs. The U of M is sitting on billions of dollars and they stick it to middle class. Pretty soon the only ones that will be able to afford to go to this rotten institution will be the out of state and foreign students. Good Day
johnnya2
Fri, Jun 17, 2011 : 1:53 p.m.
One of those examples of people thinking of % instead of what matters $. " increase for junior and senior in-state undergraduates will be about $898 per year and about $1,908 per year for out-of-state " Last time I checked $1908 is more than $898. Who really is taking a larger tuition increase?
alan
Fri, Jun 17, 2011 : 12:23 p.m.
In-state tuition, room and board- U of M $22K MSU $20K Wayne State $19K Central $19K Western $19K There are no cheap alternatives. For the potential of employment and future earnings benefit I will gladly pay the extra $2000/year to send my kid to U of M. Plus, they are much more generous with their financial aid. Half of her cost next year is from university grants and scholarships, paid from their endowment. It would be helpful if people checked before ranting.
Carole
Fri, Jun 17, 2011 : 11:52 a.m.
I would highly recommend investigating many of the other universities and colleges here in Michigan -- we have some really fine ones that don't cost an arm and now two legs and provide a very fine education.
macjont
Fri, Jun 17, 2011 : 1:01 p.m.
One pays not just for the "fine education," but for the institution granting the degree. And trust me, the name of the institution can mean a great deal. A story: approximately 35 years ago, I received a professional degree from Michigan. My wife (also with a Michigan degree) and I moved to Hawaii to live, neither of us having lined up a job in the island state. We both landed jobs very quickly. While we can't be certain, having Michigan degrees certainly did not hurt our chances for employment. In many cases, including the one employer who eventually hired me, I was granted an interview simply because I had a Michigan degree. (As I was told more than once, "at a minimum," they would at least talk with someone "from Michigan.") Also to be considered: contacts. Down the road, considerable advantage can be derived from "who you know" (sic) as much as from "what you know." And, if history is any guide, there is no better institution in this state than the University of Michigan for meeting people who will "make it." All of this is perhaps unfair and reflective of arrogance. But truth should not be ignored.
alan
Fri, Jun 17, 2011 : 12:06 p.m.
Please provide some data to support your assertion. You can look up the costs at any public school and find they are all within a couple thousand dollars of each other.
mojo
Fri, Jun 17, 2011 : 11:13 a.m.
If you charge it - they will come. I see no drop off in applications nor in total students on campus. The market is alive and well for a UofM degree.
cm
Fri, Jun 17, 2011 : 9:27 a.m.
These increase are just like when I went to U-M in the 90s. Each summer I would worry about the increase and how I was going to pay for school that year. As a lower to middle class student work multiple jobs and a number of loans, this was in stark contrast to those students whose only job was being a student and those who paid out of state fees. These increases in tuition make U-M inaccessible to the middle class. While working through school, made me a better person all around, there's no job on campus for students that will cover much of the tuition. I will encourage my own children to do their first two years at somewhere such Washtenaw Community College and then transfer somewhere else. It doesn't make sense to take on this type of debt when a quality education is available at a fraction of the price.
John B.
Fri, Jun 17, 2011 : 4:50 p.m.
Using WCC for the first two years is a very wise and cost-effective decision.... WCC is an excellent and underutilized resource.
TheJLR
Fri, Jun 17, 2011 : 4:21 a.m.
Snyder's reduction in university funding, along with the same from many other governors across the country, will eventually force universities to lower costs. This will happen when students/parents no longer pay, and force politicians to apply political pressure. Tuition is in a bubble due to home equity loans (gone now), student loans (many now can't find good paying jobs and are defaulting), and university greed (soon to be reigned in by politicians). Tuition has gone up 2-5 times the rate of inflation EVERY YEAR for the last 20 years, which=ripoff alert! Greed. Because they can. Have they no shame?? A far more serious problem than health care costs. Universities waste money, are mismanaged, are over built, fat, charge too much for lower level classes that should cost no more than a community college, and require too many classes that have no impact on student success. The unfortunate reality is that due to universities not managing their costs and programs in an ethical and socially responsible manner, many students/parents will suffer until the universities are brought back to earth. This country will also suffer. Make no mistake. The RIGHT education for those who have the ability in the right areas is essential for this country to compete. The right classes at the right cost in a system that is managed in a socially responsible manner. I feel sorry for the parents and students caught up in this.
John B.
Fri, Jun 17, 2011 : 4:48 p.m.
You fail to understand that the ones with the power (the richest 2%) care not one whit that a presitigious University education is expense. It's a drop in the bucket to them, in the big picture. Ditto healthcare. UM still has far more applicants than openings each school year. That isn't stopping in the foreseeable future (see paragraph one, above). And by the way, student loans are non-dischargeable in bankruptcy. You can't 'default' on them.
snapshot
Fri, Jun 17, 2011 : 3:15 a.m.
Congratulations to the staff and professors and their unions for showing the public that they are not interested in anybody but themselves with their refusal to do their part by merely foregoing raises. I'm glad you guys weren'taround during WWII when every citizen willingly sacrificed to save our great nation from those who would rule through force and fear. We'd be a different kind of nation now......just imagine how different or watch the news and read a paper. Thanks again foryour union support. OK to let someone else foot the bill.
snapshot
Sat, Jun 18, 2011 : 6:23 a.m.
Ignatz, you missed the point. In WWII even civilians sacrificed for the war effort with rationing and job changes. The force and fear referred to Hitler and the third reich that murdered millions and enslaved others that were different than themselves. Much the same as recent ethnic cleansing in Darfur and religious persecution in the middle east. My point is that we are on the cusp of economic doom that could virtually destroy our American way of life, and you're worried about a raise. Fro you johnnya, what do you think sales are? How about foreclosed homes? food prices are increasing because production costs and disasters are affecting prices, not because the farmers "want a raise" macjoint, you're right about increased war taxes but why do you hold the wealthy in contempt and not expect those in worse shape than you to not hold you in contempt also? That's a double standard, is it not? Do you really think the store clerk working for minimum wage should pay more taxes so you can get a raise?
macjont
Fri, Jun 17, 2011 : 3:36 p.m.
Yes? WWII. Seems to me that we paid for that war with increased taxes. Today, the wealthy ask for tax cuts and more of them.
johnnya2
Fri, Jun 17, 2011 : 1:49 p.m.
Tell us how many businesses forego their raises? I go to Kroger and I tell them this is a tough economic time so do not raise your price on produce. I went to the clothing store and asked them to forego raising prices because I wanted cheaper clothes, but they wouldn't listen. Only in America do we think employees should be the ones sacrificing EVERYTHING while every other stake holder gets what they want. If you want some REAL numbers try looking into wage disparity when union participation was the highest, and what it is now. It is people like Rick Snyder and the trickle down theorists that are the problem, not unions. I guess in your world employees should just work at minimum wage and let the haves keep raking in billions.
Ignatz
Fri, Jun 17, 2011 : 1:44 p.m.
I've worked at U-M for over 30 years. I got my degree from there, as well. In all that time, I never met any student who was forced to go there. BTW, I've had years with no or mostly very little (sub-inflation) pay increases. As far as any difference in generations be willing to sacrifice ala WWII, the main reason people join the military is due to the poor economy. I can't see very many of our students enlisting to help this nation.
pvitaly
Fri, Jun 17, 2011 : 3:09 a.m.
Because pretty much anyone can take out a loan of almost any amount, these ridiculous increases will keep happening. If "loans" didn't exist, a HUGE amount of people would not go to college with these costs. If that happened, tuition wouldn't be so high. Soon enough this market will collapse the same way the housing market did. It's only a matter of time...
John B.
Sat, Jun 18, 2011 : 6:10 p.m.
No, they will (probably) just take it from you and I (i.e. tax Dollars). Many in the financial industry are working to make student loans dischargeable, allegedly, however, fwiw. Personally, I think that in general we need to stop bailing out folks that have borrowed money that they can't repay. That said, I don't like the BS that is the student loan system in the USA. Much of the debt is at "matchbook cover" schools like the for-mega-profit University of Phoenix system(s), etc., where in some cases 98% of their gross income (!) is from student loans with almost no chance of repayment because those students got BS'ed into programs that have very low potential for job placement. It's a national scam that ought to be shut down.
say it plain
Fri, Jun 17, 2011 : 11:08 p.m.
Interesting points... so, given this scenario then, *what* will cause the education-loan bubble to burst? If the kids can't ever default, and the government takes over the programs, will the government just collect the principal-and-interest via the IRS?!
John B.
Fri, Jun 17, 2011 : 4:35 p.m.
You are correct. It is quite likely that college loans (which are non-dischargeable in bankruptcy, by the way) will be the next US financial bubble to pop.
mojo
Fri, Jun 17, 2011 : 11:15 a.m.
And to think that the Federal Government just took over all college-student loan programs. Makes you think . . . .
Knobby Kabushka
Fri, Jun 17, 2011 : 2:43 a.m.
In the next 5 years we will price middle and low income Americans right out of our own colleges and universities but as long as there is a steady supply of wealthy foreigners and the top 1% of Americans lining up to get in, they really won't give a damn...
John B.
Fri, Jun 17, 2011 : 7:34 p.m.
Correct. If you like that scenario folks, keep voting TeapubliKan!
Lovaduck
Fri, Jun 17, 2011 : 1:43 a.m.
Ah, c'mon. You wanted Snyder and yelled cut cut cut! Ok, now it's hitting you! Americans want everything cut except for the services and programs THEY happen to use. Vote for endless budget cuts and you'll pay somewhere.
trespass
Fri, Jun 17, 2011 : 12:55 a.m.
The tuition increase has little to do with the state funding cuts. The total state cut is $47 million. Provost Hanlon already has said that he is going to make up about $18 by accepting more out of state students next year. So he still has to make up $30 million out of a general fund budget of $1.6 billion. Tuition accounts for about two thirds of the general fund so a tuition increase of 3% would make up the entire cut in state funding. The tuition is going up 7% because the general fund budget steadily goes up. The Administration keeps telling us how they are making $100 million cuts to the budget but the budget still goes up much more than inflation. It's just another one of those tricks when they call it a cut because the rate of increase would have been hight if they didn't make such drastic cuts. Just say the budget is going to stay the same. Live with it!
visiongirl
Fri, Jun 17, 2011 : 12:48 a.m.
Currently I work at UofM part-time and I am a full-time grad student who is absorbing my tuition cost with NO scholarships. After working at UofM, I am truly disappointed in the wasteful spending and lack of continous improvment programs to reduce costs. The hourly union staff is out of control. Have you ever heard of the pipefitters or steamfitters going on strike? The unions run UoFM and the students are the ones who have to pay. They get everything they want without any confrontation from Mary Sue & Crew because they will subsidize the wishes of the unions by increasing tuition. There are people who are working there that should not be working there. But they continue to work there becase like professors, employees get tenure too. Instead of raising tuition, UofM need to do a better job of finding ways reduce their internal costs.
trespass
Fri, Jun 17, 2011 : 12:41 a.m.
"Hanlon said budget cuts will result in the closing of the Center for Ethics in Public Life". Well that was like the fox guarding the chicken coop anyway! Illitch made the point that more than half the UM students come from families making more than $200,000 and Hanlon said that they did not raise the out of state tuition as much because the "cultural diversity" was worse for the out of state students than the in state students (i.e. they are even richer rich kids). The black student body president who ran on a platform of keeping tuition affordable said "don't do it". Like that will convince the Regents and President Coleman. How naive was he and everyone who voted for him. You don't get anything from the Regents unless you are willing to fight. How about organizing students to campaign against any Regent who raises tuition? Both Regent Newman and Regent Richner campaigned in the last election that they would keep tuition increases to the rate of inflation. They both voted for the budget. If they voted against it, it would not have passed on a 4-4 vote. They lied, surprise, surprise!
Cash
Fri, Jun 17, 2011 : 12:10 a.m.
What a deal. Tuition and fees increase..... so now students and parents can borrow even MORE money and get deeper in debt.
deb
Fri, Jun 17, 2011 : 12:10 a.m.
Look at the current headlines on annarbor.com New C.S. Mott Hospital among projects that will strain University of Michigan Health System budget in 2012 Michigan Board of Regents approves $14 million Yost Arena renovation project U-M regents approve $23 million expansion to Institute for Social Research University of Michigan Regents approve multimillion-dollar demolition, kitchen renovation projects Michigan athletic department expects to double surplus in 2012 after 10th straight year in black They even have their Pr guy on the annarbor.com editorial board
Morris Thorpe
Thu, Jun 16, 2011 : 10:59 p.m.
Kyle, you need to give readers perspective: What are the current tuition fees? If anyone wants to learn more.... <a href="http://www.finaid.umich.edu/TopNav/AboutUMFinancialAid/CostofAttendance.aspx" rel='nofollow'>http://www.finaid.umich.edu/TopNav/AboutUMFinancialAid/CostofAttendance.aspx</a> I don't know if those fees reflect the increase or not. In-State freshmen will pay $11,837. Out-of-state freshmen, $36,001 Plus books and room and board. This is certainly a symptom of a sick society.
Morris Thorpe
Fri, Jun 17, 2011 : 2:59 p.m.
I'm guessing no one is reading this anymore but oh well... johnny, It will be interesting to see what happens to the current crop of students. Things are getting worse for college grads. You know a degree doesn't cost 60K. The page I linked estimates annual cost at about 25K. That's 125K. And for most, that money is coming from unforgivable loans. And if you're out of state? 250K. Graduating with that much debt and bad job prospects is *not* a good deal.
johnnya2
Fri, Jun 17, 2011 : 1:40 p.m.
Ok Rodney, if that " is certainly a symptom of a sick society." Why not tell us what the average grad at UM makes over a lifetime versus a non college grad.. Let's say it took them 5 years to complete their degree. That translates into a cost of $59,185. Now spread that out over a 30 year (probably more) career. It translates into $1973 per year over what a non-graduate would make. Ask an employer if they feel $2000 a year for a UM educated employee is better for them than a Pioneer High grad. As for room and board, I really think this is one of those areas where people forget that there is a cost for these things whether they go to college or not. Even those that live at home incur a cost to their families when they eat more food use more electricity, hot water, drive dads car etc etc. Seems to me the $11,837 is a bargain
Rork Kuick
Fri, Jun 17, 2011 : 12:38 p.m.
Thanks for filling that hole Rodney. I don't understand how they managed to omit those figures.
Christopher LeClair
Thu, Jun 16, 2011 : 10:52 p.m.
Unfortunately Rick Snyder's millionaire tax bonuses came at the direct expense of the Michigan middle class. As students are struggling to pay their way through college, the state passed funding cuts that will make it even harder for hard working Michigan residents to attend college. It is unfortunate that this seems to be a battle aimed directly at the poor, elderly, children, and public workers. Who is winning then?
Z-man
Tue, Jun 21, 2011 : 3:04 p.m.
Just as I thought...nobody is backing up this assertion of "Snyder's millionaire tax bonuses."
Z-man
Mon, Jun 20, 2011 : 6:51 p.m.
What "millionaire tax bonuses" are you referring to? I was not aware that Governor Snyder is implementing such bonuses.
1bit
Fri, Jun 17, 2011 : 1:13 a.m.
Ja: I agree that it is a statewide issue. There isn't enough money to pay for the largess of our University system in this state. Even with the budget cuts (or better, in spite of them) U of M is handing out raises and such. Quite frankly, U of M saw decreasing State funds coming decades ago and I don't think they care much about the cuts because they will do what they want to do anyway. Even during the boom years of the 1990's they still raised tuition. As others have noted, it is supply and demand, it is an "education bubble", and it is escalationism with each school trying to outbuild each other. There is no incentive to stop spending money because people are willing to pay it. At times I believe the best thing would be for U of M to go private, charge whatever they want and allow the rest of the money they are receiving from the State to go to other schools in Michigan.
Ja
Fri, Jun 17, 2011 : 12:38 a.m.
Great article. I understand completely but it seems that the largest percentage hikes seem to occur when there are budgets cuts to higher education. It is just not UofM hurting here. All over the state of Michigan the college and K-12 budgets are being dramatically squeezed. While it is unfortunate that Michigan raises it's tuition seemingly so much, it's more the broader state-wide picture that I am concerned with.
1bit
Fri, Jun 17, 2011 : 12:30 a.m.
Who is winning? U of M is, of course. You are deluding yourself if you think anything Gov. Snyder did or didn't do would have affected tuition increases significantly. Look at this graph in this annarbor.com article: <a href="http://www.annarbor.com/news/decades-of-tuition-hikes-make-working-your-way-through-college-impossible-without-debt/">http://www.annarbor.com/news/decades-of-tuition-hikes-make-working-your-way-through-college-impossible-without-debt/</a> It is practically a straight line increase in tuition since 1990. Although convenient to blame Gov. Snyder, it is a fairly myopic view given trends that have been going on for decades.
Rob Pollard
Thu, Jun 16, 2011 : 10:50 p.m.
- People commenting on the athletic department: it is completely self-funded (as opposed to say, EMU or WMU or pretty much most other institutions). This tuition increase has absolutely zero to do with the new scoreboards, the new practice facility, etc. - Regarding "inflation" - you folks realize U of M's funding from the state was cut 15%, correct? That's a heck of a lot more than inflation, or even what they can reasonably expect to get a return on its endowment. Plus, EMU kept their tuition increase last year to 0% (well-below inflation). What was their reward? You guessed it, the same 15% cut as everyone else. - U of M had 38,000 applications last year for about 6,000 freshman spots; they have more applications than they frankly know what to do with (<a href="http://thechoice.blogs.nytimes.com/2011/04/26/u-mich/)" rel='nofollow'>http://thechoice.blogs.nytimes.com/2011/04/26/u-mich/)</a>. They only need to accept about 12-15,000 of those 38,000 to get their numbers. If you want them to manage it "like a business", try this: there is very high demand for a limited supply and other revenue from other sources (e.g., support from the state) has decreased. As a result, the price of tuition goes up. Notice it went up more for in-state than out-of-state. As U of M gets less support from the state, it will continue to do that.
John B.
Fri, Jun 17, 2011 : 4:29 p.m.
Yes, the state funding was cut 15%, but that represents less than a 1% cut to the total funding of UM (about 94% of UM's funding does not come from the state, which is why they could potentially go private if they chose to), so I don't really see your argument (from a funding cut standpoint). The tuition increase is due almost entirely to other reasons, like 'charging what the market will bear,' in part.
johnnya2
Fri, Jun 17, 2011 : 1:32 p.m.
Deb the athletic department DOES give. IT pays FULL tuition for all athletes and over 60% are from out of state. This year the department GAVE about $2 million to the general fund. But don't let facts get in the way of what you want.
Mich Res and Alum
Fri, Jun 17, 2011 : 1:09 p.m.
Deb, it's not like the athletic department can help. They often make it into the black by just a few hundred thousand dollars. That money is typically put towards capital projects. We are lucky to have an AD that breaks even - most schools have students pay for the athletic department. We don't. It would be ludicrous to open that flood gate.
deb
Fri, Jun 17, 2011 : 12:06 a.m.
everyone realizes its completley self funded, but its not like its a part of the university or something? Wait it is, and maybe some of that money should go to the U to prevent a increase intuition?
markguy
Thu, Jun 16, 2011 : 10:06 p.m.
Tuition goes up, just like the new scoreboards at the stadium, the basketball practice facility, and the most important capital expenditure of all: whatever the hell they are building on the golf range off Main. It's nuts.
johnnya2
Fri, Jun 17, 2011 : 1:29 p.m.
Ok Don Bee, do it your way. End all athletic funding. All those out of state athletes will no longer attend the UM. The athletic department will no longer give millions to the general fund either. Many times people give money to the U with very SPECIFIC criteria. If I give this you MUST use it for this department. All those athletic department gifts can be refunded. If you think the U would be better off not being a competitive school athletically, I suggest you look at EMU and see how it is going there. I never hear anybody complain about the building over on the medical campus. The U is not Washtenaw Community College. It functions beyond just a classroom education for students.
DonBee
Fri, Jun 17, 2011 : 9:51 a.m.
Kyle - The division is one the university makes, not one that is by law. There is a large amount of unrestricted endowment, but the UofM needs to keep score by keeping a massive endowment. Higher tuition causes international students to think the UofM is the best. The good new is if you are poor enough, you can get grants. The folks squeezed by this are not the rich or the poor, but the middle income folks.
Kyle Feldscher
Thu, Jun 16, 2011 : 10:10 p.m.
markguy- Those projects you are speaking of are funded form the athletic budget and are not related to tuition increases. They are funded separately.
treetowncartel
Thu, Jun 16, 2011 : 9:59 p.m.
Michigan athletic department expects to double surplus in 2012 after 10th straight year in black
GoBlue1984
Thu, Jun 16, 2011 : 9:45 p.m.
Thanks Snyder. Glad your kids can afford U of M. They're about the only kids who can these days. Those poor kids don't need college anyway... I mean, someone has to be a gas station attendant, right? Thanks again Snyder.
GoBlue1984
Sun, Jun 19, 2011 : 2:54 a.m.
We agree on a lot of things, and disagree on a few others. However, we *really* disagree on this: "Yes, U of M runs like a business. They are to blame " Snyder ran on the promise of turning the state into more of a business. It makes sense, then, that the colleges funded by the state (i.e., U of M) would then have increased motivation to run like a business. That's what Snyder wanted. That's what he got with this tuition increase. U of M had a 47.5 million dollar cut this year in state funds. This tuition increase raises 46.4 million of those dollars back. I hope Snyder's happy.
1bit
Sat, Jun 18, 2011 : 11:57 a.m.
Maybe we're not really disagreeing (except about blaming Snyder). 1. "making consumers pay for the increased cost of a good"... I'm not disagreeing with you completely here, but as you read my comments I am saying that U of M is raising tuition by more than the amount the State cut. If you look at historical data, U of M has had a fairly linear increase in tuition since 1990. And as you learned in basic statistics, correlation is not causation. 2. "When that price increase affects all competitors equally..." This is simply not true. The cuts and their affects vary between every University in Michigan. 3. "I would personally be shocked if any of the schools decided to increase their cost of tuition at a rate that didn't make up for the Snyder cut." I agree. My point is that not only will they do that but they will continue to increase the cost as the demand for a U of M degree is still very high. You agree with me and my previous comment on widgets, "The only logical explanation for a school not increasing their tuition at a rate that would make up for the cut is due to their student body being completely unable to afford the increase." 4. "When Snyder imposed these cuts he didn't really think about those kids with parents making less than 200k." My supposition is that when Snyder made cuts to the State budget, he was thinking about the State financial picture. Your assumption about the average income of families at the U of M is based on what? U of M doesn't keep such statistics. As I noted elsewhere, in 2004 roughly 45% of incoming freshman reported family incomes of less than $100,000. Even if the average family income is as high as you suppose, the median family income would be a more meaningful value as it is very likely that the income distribution will not be normal. And there would probably be large differences in in-state and out-of-state families. Yes, U of M runs like a business. They are to blame
GoBlue1984
Sat, Jun 18, 2011 : 5:04 a.m.
@1bit, I'd be very surprised if they taught you that in business school. It's been 20 years since I received my MBA, but I don't think common business practices (i.e., making consumers pay for the increased cost of a good) have changed. When that price increase affects all competitors equally, it makes complete sense for all affected businesses (schools) to raise their prices accordingly. Cutting education funding across the board has affected all public universities in Michigan, and I would personally be shocked if any of the schools decided to increase their cost of tuition at a rate that didn't make up for the Snyder cut. The only logical explanation for a school not increasing their tuition at a rate that would make up for the cut is due to their student body being completely unable to afford the increase. With The University of Michigan, that really isn't an issue. The average student has parents making 200k or more a year. When Snyder imposed these cuts he didn't really think about those kids with parents making less than 200k. Or maybe he did and he just didn't care. Either way, cutting education funding to this extent was a really terrible decision. As I've said over and over again, Synder wants U of M and other schools to run like a business... well I hope he's happy with the result.
1bit
Fri, Jun 17, 2011 : 10:08 p.m.
GoBlue: As many others have noted, you can only pass the cost of the widget on to the consumer if the consumer is willing to pay it or can't find a similar widget elsewhere that is less expensive. And yes, I blame U of M because they ultimately control the cost of the widget.
johnnya2
Fri, Jun 17, 2011 : 1:12 p.m.
Don Bee, Pricing is what the market will bear PERIOD. If students stop coming to the UM, then the price is too high. As long as they still attend (which the numbers indicate they have plenty of applicants and plenty enrolled) then the business can price until that number drops. I do not believe in state institutions being run like a business, BUT if that is your metric, than they can price it until demand for their service drops. Give me any metric that shows that has happened. Apple came out with the IPhone in the middle of a recession and has become the largest company in market capitalization. I don;t see people leaving their Iphones,. Ipods and Ipads for the cheaper item, If you ran a business based on cost containment instead of top line revenue increases you would be a failure. GM, Ford, and Chrysler all started losing money when SALES decreased, not when expenses went up. The sales did not decrease due to cheaper products in the market. If that were the case, the Yugo would be the number one selling car in America. Ford sells a ton of F150s, but it is not the lowest price car on the road.
DonBee
Fri, Jun 17, 2011 : 9:49 a.m.
GoBlue84- I suspect you were in the food, or service industry. Since a manufacturer has to compete globally. If my costs go up, I have to find a way to offset it as much as I can or the contract goes to someone with lower costs. Don't believe me, look at all the factories relocating to China, Mexico and now Vietnam. In the IT services industry, most of the good jobs went to India because it was cheaper. Some are now coming back from India to Michigan because wages here fell.
GoBlue1984
Fri, Jun 17, 2011 : 2:18 a.m.
Actually Stephen, I've been a business owner for many years myself and I can tell you... if the cost of a, let's say, widget goes from 10cents to 15cents, that cost is almost always passed on to the consumer. It's very basic business knowledge, and if you actually were familiar with how a business runs you'd already know this. Snyder wants schools to run like a business? Well, U of M has done just that with this increase. I don't blame them at all... I blame the guy who raised the price of widgets.
Stephen Landes
Thu, Jun 16, 2011 : 11 p.m.
GoBlue1984 -- you're wrong about business costs just being passed on to the customer. Business wouldn't survive if that were the case. In the business I worked in for 35 years (auto manufacturing) the increase in materials costs was a spur to find cost reductions -- using less, finding alternatives, using technology to reduce other costs. The U doesn't seem to do any of that; as if there is no alternative to doing things the way they have always done them.
GoBlue1984
Thu, Jun 16, 2011 : 10:56 p.m.
@1bit Synder wants schools and the state to run like a business... well, in business when a cost for a good goes up that increased cost is passed onto the consumer. Thanking Snyder is, therefore, appropriate here.
1bit
Thu, Jun 16, 2011 : 10:43 p.m.
Maybe you are reading a different article than I am. U of M is still spending a ton of money in spite of cuts. They are closing centers, but hiring more faculty? Just so they can lay them off next year? Governor Snyder does not control the University of Michigan. U of M decides how it wants to spend its money. And they'll keep raising tuition as long as people are willing to pay it. And they'll assuredly spend as many State dollars as we want to give them without any assurance that they won't raise tuition.
John B.
Thu, Jun 16, 2011 : 9:22 p.m.
Unhappy? See: Snyder, Rich.
John B.
Thu, Jun 16, 2011 : 9:14 p.m.
No big surprise here. We knew it would be close to 7%. Expect about the same rate of increase (or slightly more) from EMU. Inflation is officially about 3.2%, by the way, and the real inflation rate is more than that. I know that just about everything that I puchase has been increasing in price recently....
bruceae
Thu, Jun 16, 2011 : 9:13 p.m.
Right, we sure wouldn't want U of M to have to manage this like a business and actually keep costs down to the rate of inflation. Or even worse we wouldn't want them to have to spend any of the 2 BILLION dollars they have. The bubble won't burst until U of M can't get enough people to fill all of the freshman slots. They absolutely do not care that they are pricing the average person right out. becasue let's face it the are "the Harvard of the Midwest", (they think so anyway) Besides once they price out Jane and John average they can bring in a lot more of their favorite foreign students who pay the really big bucks.
GettingBluer
Fri, Jun 17, 2011 : 10:30 a.m.
You raise some interesting points, particularly with pricing out of U.S. students. I'd actually be in favor of a law that says that if your foreign students are more than 5% of total students, you lose ALL taxpayer funding. After all, it isn't MY job to subsidize the education of rich foreigners.
GoBlue1984
Fri, Jun 17, 2011 : 2:47 a.m.
Passing increased costs off to the consumer is right out of the "how to run a business" playbook. When will you Republicans learn? Do as I say and not as I do... seems to be a theme.
1bit
Fri, Jun 17, 2011 : 1:22 a.m.
John B: A survey of freshman in 2004 found a self-reported family income of less than $100,000 in 45%. <a href="http://ns.umich.edu/index.html?Releases/2005/Feb05/finaidqa" rel='nofollow'>http://ns.umich.edu/index.html?Releases/2005/Feb05/finaidqa</a>
say it plain
Thu, Jun 16, 2011 : 10:11 p.m.
exactly right @glaciererratic. Why do we allow *state* colleges of any sort to be run like those businesses you refer to?! I mean, I know the general atmosphere of college in the US is not like it is in the rest of the world...we get all 'oh, we provide the "best" education' blahblah about ourselves, but we do all realize that students today are *not* getting the wonderful undergraduate educations they used to, studies indicate they often learn little indeed, and we pay massive amounts of money for it. If the government were collecting the billions these schools have in endowments, we-the-people could pay from that revenue for *everyone* to get a free undergrad education, no?! Like they do in Europe?! But then there would be less money in it for bankers who keep our young adults in obscene amounts of debt for years and years, so, no go. Just awful, the whole scene...
glacialerratic
Thu, Jun 16, 2011 : 9:26 p.m.
Oh? Which business do you mean? Banking and the financial industry? Or oil and gas refiners? How about pharmaceuticals, health care and health insurance? Business as a model is a complete joke.
John B.
Thu, Jun 16, 2011 : 9:17 p.m.
I think what you described already happened some time time ago. I've heard that the average family income of UM students is $180K. If true, that's a lot, from where I sit....
say it plain
Thu, Jun 16, 2011 : 9:04 p.m.
Lord, you can't get more than .30 interest on your normal-person savings account, UM has a couple billion dollars saved away in their endowment with million-dollar-a-year portfolio managers getting them, I presume, decent rates of return on their fortune, and they turn around and ask regular working folk to come up with multiple-multiple times the rate-of-inflation more to have the privilege of listening to the same profs as last year give their wisdom. Why do Americans take this crap? When is the college-costs bubble going to burst?!
say it plain
Fri, Jun 17, 2011 : 2:01 a.m.
If @mohomed was saying that UM isn't "worth all that", as it were, then indeed that is relevant to my wondering when the college-costs bubble is going to burst! We all need to stop being willing to pay the ransom being asked by the "big name" universities! There is a nasty little secret they have...many many of them don't give any better educations than colleges costing waaay less! There is a difference between the quality of the research being conducted by the faculty--and UM and other high-ticket-price schools surely have an edge in terms of the research of the faculty--and the quality of the education received. This might *not* be the case for graduate school of course, but very few undergrads get to take advantage of the opportunities presented by better researchers standing in front of their classrooms. And I believe that cost-benefit analyses are being conducted--finally!--to show that maybe the high ticket prices for big-name schools are starting to cost more than they're 'worth'.
mohomed
Fri, Jun 17, 2011 : 1:41 a.m.
How did I violate your guidelines and get my reply removed? I said nothing offensive and only mentioned my degree from Ferris and UM grads I work with have no advantages over me or others with B.S. degree's from other schools. Is it because I have a Muslim name, what gives AA News!