Annual University financial report discusses financial position, debt, revenue
The University of Michigan released its annual financial report Thursday morning, detailing all of its financial activity throughout the year, including information on the University’s net position, its debt, revenue for operating activities and more. The finances were recorded from June 2016 to June 2017.
The net position, which indicates the University’s overall financial position, increased from $12.2 billion in June 2016 to $13.4 billion in June 2017. Kevin P. Hegarty, chief financial officer of the University, mentioned the 2017 net position increase in a statement while emphasizing the strength of the University’s current financial status.
The University’s greatest source of revenue was from the patient care administered in the University Hospital. Excluding revenues from the health system and clinical activities, the net student tuition and fees brings in the most revenue for the University. According to the report, the University then uses this revenue to fund its other operations including financial aid and research.
In his message, University President Mark Schlissel attributed the University’s support of students and programs to its strong finances. He also noted the importance of monitoring funds and seeking investments in order to keep the cost of attending the University reasonable.
“Keeping U-M’s high-quality education affordable depends on all of these essential elements — cost control, increasing financial aid, tuition restraint and philanthropy — along with what we hope will be a continuation of reinvestment by the state in higher education,” Schlissel wrote.
With financial successes, though, come financial burdens. The University’s composition debt increased from $2.2 billion to $2.3 billion. The report also discusses the negative effects the state of Michigan’s difficult economy can have on the University’s financial standing. Due to these challenging factors, the University implemented a tuition increase for all of its students.
The 2.9 percent increase for in-state students and the 4.5 increase for out-of-state students were revealed at a Board of Regents meeting in June. This increase was introduced along with the Go Blue Guarantee, a commitment of free tuition to in-state students with a family income of less than $65,000. University Regent Denise Ilitch, D, in previous years voted to decrease tuition but voted to increase it this year because of the Go Blue Guarantee.
“You can’t raise every year, and it’s very difficult to vote no every year,” she said in June. “This is an inflation increase for in-state students, and what has really excited me is this Go Blue Guarantee.”
The University remains optimistic in its financial endeavors. Jerry A. May, vice president for development, credited the University’s donors and volunteers with helping the University achieve its goals.
“Thanks in large part to our outstanding donors and volunteers, U-M continues to lead in its mission to challenge the present and enrich the future,” he said in a statement. “Let us be forever valiant in securing and advancing that promise through the next century.”