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Original article URL: http://bridgemi.com/2013/03/as-student-debts-mount-universities-see-little-good-news-in-state-budget-figures/

Talent & education

As student debts mount, universities see little good news in state budget figures

Danielle Horton, 21, will be graduating in May from Michigan State University with a degree in social work and a debt that worries her.

“I will be approximately $60,000 in debt,” says the mother of two young children. “It’s discouraging. I pray I make enough money to afford tuition for my children so they will not have to depend on financial aid like I do.”

While tuition more than doubled over the past decade at Michigan universities, policy-makers cut need-based grants by 20 percent, invested the least in grant dollars per student in the Midwest, offered grants to only 14 percent of students and gave a large share of need-based grants to students from higher-income families attending private colleges, according to a Michigan League for Public Policy report — Keeping it Affordable in Michigan: Disinvestment in Financial Aid Grants Hurts Students and Their Families.

Lower state support for Michigan universities, coupled with diminished need-based grants, is a double-whammy for Michigan college students and their parents, leading to crippling student loan debt and questions about whether Michigan is as committed to higher education as many other states.

In his 2014 budget plan, Gov. Rick Snyder called for $1.43 billion in state aid to Michigan’s universities, most of it from the state’s general fund and an increase of 2.2 percent from the current year.

However, Donald Heller, dean of the College of Education at Michigan State University, at MSU, says the 2 percent increase “is certainly not enough.

“We in higher education would like to see more, but we recognize the governor is trying to be conservative given the shaky state of the economy and other pressing needs,” said Heller. “I don’t expect higher education funding to recover after this most recent recession as it had in most other states in past recessions, and I’m afraid that this proposed increase is emblematic of that concern.”

Snyder’s budget does call for a $3.2 million increase in the state’s “Tuition Incentive Program” for low-income students, which now aids about 15,000 students – most of them at community colleges. Most of the state’s other tuition programs are recommended for continuation funding under the governor’s plan.

Ten grand
should cover it
Michigan’s 15 public university campuses have varying tuition costs, but students and parents can generally expect a $10,000 per year commitment in tuition and fees, according to 2012-13 average figures for freshmen compiled by the House and Senate Fiscal Agencies.
 
Saginaw Valley State $8,120
Northern Michigan $8,934
Eastern Michigan $9,114
U-M Flint $9,514
Lake Superior State $9,640
Grand Valley State $10,078
Wayne State $10,190
Oakland $10,230
Western Michigan $10,282
U-M Dearborn $10,482
Ferris State $10,710
Central Michigan $10,950
Michigan State $12,623
U-M Ann Arbor $12,994
Michigan Tech $13,353

Last year, a Bridge Magazine analysis on higher education compared the cost of attending Michigan public universities to public universities in other states. The results were clear. Michigan gives less money to its public universities and students are paying more money to attend state universities than students in almost every other state. In just four years, there was a 49 percent increase in student loans at Michigan’s 15 public universities, according to the analysis.

The study showed that 12 of Michigan’s 15 public universities had net student costs higher than the median of their peer institutions across the country. Michigan State with a net cost of $14,708 and the University of Michigan, Ann Arbor with $16,888 in 2008-09 had the 6th and 15th highest net cost out of 73 schools in their peer group across the nation.

For some students, these numbers are less than promising. MSU student Elicia Benjamin, a 21-year-old California native, has accumulated a mountain of debt over the years from her decision to attend school in Michigan. In May, the political science/pre-law major will have $176,000 in college debt because she is an out-of-state student.

With costs increasing, financial aid decreasing and state appropriations only reaching a 2 percent climb, Benjamin says it’s becoming difficult.

“Increasing tuition and decreasing financial aid is limiting the accessibility to a good education. It is becoming unaffordable with no assistance,” says Benjamin. “I think that every state should invest more in higher education. Empowering individuals and providing greater accessibility to higher education so that our generation and future generations can have the ability to have a bright future is worth investing in.”

For in-state freshmen this year, a full year’s tuition and fees can range from $8,120 at Saginaw Valley State University to $13,353 at Michigan Tech in Houghton. (See table at right.)

Mike Boulus, executive director of the President Council State Universities of Michigan, the universities’ advocacy arm, says change is in order.

“I think policy-makers view universities as having an alternative source of revenue called tuition. So they feel like they can cut us more than maybe some other item in the budget,” says Boulus. “We cannot sustain the model we’ve been on over the last decade which is cut, cut, cut, cut. It’s an unsustainable model. I think we will be able to moderate tuition dramatically if we were able to get a more significant investment from the state.”

Boulus says a more significant investment would be a “100 million dollars a year.

“We can’t get it all back in one swoop but 100 million dollars a year for the next 10 years is really what we’re asking. 100 million dollars would restore what we lost over the last decade,” says Boulus. “I think tuition would slow down. No question about it. I think affordability and access is the key to this whole issue.”

Despite the debt, Benjamin says she wouldn’t change her decision:

“I have thought about the additional debt I am going to accumulate attending law school. But, in the end it is all worth it. No one can take away your education or the experience and lessons you learn in college.”

Taylor Trammell is the 2012-13 Center for Michigan journalism student fellow. She is pursuing a journalism degree at Wayne State University.

11 comments from Bridge readers.Add mine!

  1. Max Bishop

    This article isn’t wrong, but it is misleading, insofar as the students quoted here have much higher debt than most college students in Michigan. According to the most recent numbers from the Project on Student Debt, 38 percent of students who graduated from Michigan schools in 2011 had no debt at all and, among those who did, the average debt was $ 27,451. At MSU and the University of Michigan, most students had no debt. Rising debt is a problem, of course, but framing it in terms of extreme cases doesn’t help.

    The source of the numbers I’m quoting is here: http://projectonstudentdebt.org/state_by_state-data.php

    1. Derek Melot

      Mr. Bishop, Thank you for your comment. In January 2012, Bridge published a “debt snapshot” for each of the state’s 15 public universities. You can access it at http://bridgemi.com/2012/01/student-debt-snapshot-for-each-michigan-university/.

    2. Joe

      Without jobs available, many undergraduates are continuing on to complete a graduate degree which adds another $30,000 to their $30,000 undergraduate debt for total debt of $60,000 in loans and interest rates from 5 to 7%. The 38% that leave without debt have wealthier parents that invested in MET or just pay the tab. A legacy of wealth gives these fortunate graduates a leg up on job prospects (they can be more selective), investing (i.e. house/stock) and marriage. Who wants to marry someone $60,000 in debt (outside of a doctor that will pay it off in a year following residency)? The Republicans added insult to injury when they eliminated subsidized loans for graduate students. Germany, the strongest economy in Europe, provides nearly free college educations for its citizens.

  2. R A B

    I would urge Ms. Benjamin to reconsider her decision to go to law school. She indicated she already has $176,000 in non-dischargable undergraduate student loan debt. Law school will likely cost approximately $250,000. She will be graduating into a legal market that is so saturated that only one out of two students is finding a legal job requiring a J.D. and few of those jobs will even do debt service on Ms. Benjamin’s debt. Ms. Benjamin and others considering law school should investigate by reading the recent New York Times, Wall Street Journal, etc. articles on law school in addition to the various blogs such as Inside the Law School Scam Blog and Outside the Law School Scam Blog. This choice will effect the rest of her life since this debt is non-dischargeable in bankruptcy. Best of luck to her.

  3. Charles Richards

    Mr. Boulus says, “We cannot sustain the model we’ve been on over the last decade which is cut, cut, cut, cut. It’s an unsustainable model.” Indeed they can’t. Richard Posner, in his blog of March 3, 2013, quotes a document about law schools that he says may be applicable to college education in general. He says of law schools that ” preoccupation with the annual ranking of schools by U.S. News and World Reports gives schools a perverse incentive to spend more in areas rewarded by the U.S. News formula. Two examples are expenditures per student and faculty-student ratios, which have risen dramatically in the decades since the rankings went into effect.” Colleges in general have seen their expenditures per student and administrative staff per student increase markedly. Mr. Boulus insists that state aid and tuition continue to finance their lack of restraint.

    Ms. Benjamin should consider that while an education is valuable, “A recent report found only half as many entry level job openings as individuals passing the bar”

  4. Charlie

    If I’m reading this correctly Ms. Benjimin already has a debt load of $176,000 dollars, then she is going to add on say conservatively another 125,000 dollars to go to law school. I would have to say she is delusional. Please have her read the web sites regarding the Law School scam or outside the law school scam. She will have a 50% chance that she will never practice law. She may as well as take the law school tuition and hit the casinos.

  5. Anon

    Ms. Benjamin states: “I have thought about the additional debt I am going to accumulate attending law school. But, in the end it is all worth it. No one can take away your education or the experience and lessons you learn in college.”

    She’s right about nobody being able to take away your education and experience and lessons. But she’s sadly mistaken if she thinks that’s the same as them being valuable to employers.

    Law school = debt + unemployment.

    Go read outsidethelawschoolscam.blogspot.com and insidethelawschoolscam.blogspot.com for reasons why Ms. Benjamin is on the fast track to failure.

  6. Matt

    Education like most things in life is about wants verses resources. Community College or 4 year university? Public verses private? Home or dorm? In state or out of state? A job or graduate school? And the choices make a huge difference in what is invested but almost no difference in career attainment and prospects. It isn’t just the wealthy that graduate with no or little student debt. Most folks realize we don’t get to do/have everything we want either, we choose accordingly, Ms Benjamin her like need to get a clue. Sorry we just don’t care!

  7. Michael

    The debt problem of college students has nothing to do with State funding. The problem is the ease in securing college loans and schools giving out degrees that are of little value. How many more waiters, burger flippers or truck drivers do we need with degrees in social work, history and elementary education. The State would be doing young people a great service by closing half of our colleges and controlling the amount and type of degrees that were offered. Sorry, but four years of drinking beer and advanced finger painting should be pay as you go programs,

  8. Ron Lemke

    I worked in Education for almost 40 years. This idea that you must earn a 4 year college degree was and still is not realistic for many. The trades have been and continue to be ignored by many because an educator once said to me” I want kids to shower before they go to work not after.’ I personally spoke with over 18000 high school graduates 1 3 5 and 6 years after graduation. College is definitely not the answer for all of them. Life long learning most definitely is. Ron

  9. Ron

    Our present graduation requirements for all students are not realistic. 4 years of math, physics or Chemistry, foreigh language etc. Be realistic.

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