From the Daily: A necessary reality

BY THE MICHIGAN DAILY

Published February 17, 2015

According to a study conducted by The Ann Arbor News, the University’s non-resident freshman enrollment has increased 11.3 percent while resident freshmen enrollment has decreased by 8.3 percent since 2010. Similarly, students from California and New York make up roughly 5.6 percent and 5 percent, respectively, of the undergraduate and graduate populations combined. Illinois is not far behind at 4.5 percent of the total student population. The majority of international students come from China and India, combining to make up 7.7 percent of students. Several in-state residents have expressed concern that the increase in out-of-state application acceptances will leave Michigan students behind. However, many of the theories about out-of-state students seem to be exaggerated myths.

The general concern about the increase in out-of-state students is that the tax dollars Michigan residents have been paying to the University for years, by way of state taxes, have been wasted due to the decrease of in-state students. However, state funding to the University has not been consistent throughout the past decade. University Provost Martha Pollack expressed the University’s struggle with state divestment from higher education, explaining that the state’s per-student funding is 60 percent of what it was just 10 years ago. Though, in 2013, Pollack said the increase was due to a dwindling state population, rather than a need for more financial resources. Taking a closer look at the school’s budget, we see that $295 million per year comes from the state. This is a large number, but not necessarily a large portion of what goes into running such a renowned and large university. Fifty-five years ago, state support accounted for 78 percent of the University’s general funding. With such a drastic decrease in support to the University’s General Fund — which pays for teaching, service and administrative support costs — by the state, it’s understandable that the University would accept more out-of-state students, who pay tuition rates nearly triple that of in-state students.

The University’s attempt to combat the discrepancy with state funding speaks for itself. When one looks at the $178 million it invests toward financial aid for in-state undergraduates and $147.5 million for out-of-staters, it’s easy to see the University’s focus. Given the discrepancy in the number of in-state students, of which there are 11,666 undergraduates, versus the 5,698 out-of-stater undergraduates, the scales are weighted heavily on the side of in-state residents. Additionally, the revenue generated by the noticeable difference between in-state and out-of-state tuition students is vast. More specifically, in 2014, out-of-state students paid a $41,578 per-year bill with a 3.4 percent tuition increase compared to an in-state cost of $13,158 and a 1.6 percent increase. This will result in $150 million more in funds coming from out-of-state residents, despite out-of-state undergraduates being significantly outnumbered in the overall student population. The University seems to be doing its best to look out for the costs of its in-state residents.

The real issue in funding stems from more systemic issues in the state’s legislature and its monetary support to schools. The problem isn’t the increasing desire for out-of-state residents to attend such a great school, but rather where the state of Michigan chooses to allocate its resources — more specifically, the state’s investment of an unprecedented $1 billion a year toward in-state charter schools. Charter schools take needed attention away from a focus on public high schools in Michigan. State graduation rates peaked in 2008 (also unprecedented by any other state) and have been dropping since, though they did improve slightly last year. Funding charter schools takes money from the state and gives it to privately run institutions that have been described by The Detroit Free Press as having a lack of transparency with their spending habits. This begs the question: why is all of this state money going toward privately run institutions instead of our public schools? The idea seems to benefit a select few in-state residents while leaving out those most subject to the public school system.

If the state keeps treating the University as if it’s a private school, then it will have to change its business practices in order to remain the competitive institution where parents want to send their kids. Out-of-state students bring diversity to the student population, they bring money that lightens the load for in-state students and apparently for the state government, which is now choosing to send more of its funds elsewhere. While increasing out-of-state enrollment may seem controversial, in reality, it is one of the few options the University has to keep its budget balanced and remain a top-tier institution.