Courant: ‘U’ is not a business

Students who are frustrated or simply curious about this year’s sizable tuition increase had an opportunity to voice their concerns last night in the Michigan Union.

Former University Provost and Economics Prof. Paul Courant explained to students the University’s budget and the value of higher education while speaking in the U-Club.

Courant said future tuition hikes are inevitable and needed in order to maintain the “highest standard of learning and teaching” at the University.

This year’s tuition increase of 12.3 percent is more than four times the size of last year’s increase of 2.8 percent, resulting in an extra $1,000 in average tuition fees.

The tuition hike came after Gov. Jennifer Granholm’s proposed budget for the fiscal year 2006 slashed $5.9 million from the University’s appropriations.

The state’s steady cuts in higher education funding over the past few years have been one of the key reasons for tuition increases. Courant said that if the University’s allotment had kept pace with inflation over the years, the University would have had an extra $82 million, enough money to keep the lid on tuition hikes. But for FY 2006, the state is only providing $316 million of the University’s total budget of $4.4 billion.

But Courant said another important reason for the tuition increases is the University’s ongoing need to preserve its ability to act as a conservatory for knowledge. He said the University must ensure it can preserve historically significant scholarship and recruit new expertise.

“We’re a high-cost, high-value institution, and it’s very important that we don’t become a low-cost, low-value operation, so tuition will keep increasing,” he said.

LSA sophomore and economics major Christina Seeber said she agreed with Courant’s justification of higher tuition.

“The points that were made about the increase are valid and make good sense,” she said. “It would be nice but completely unrealistic to not have an increase.”

Courant also talked about how much money the University needs to spend to maintain the highest standards of teaching and research. He said half of the University’s budget is dedicated to the University Hospital.

a necessary expense to allow its premier medical program to flourish.

Another $200 million of the University’s budget goes toward nonacademic expenses such as athletics and housing. After these and other expenses are subtracted, only $1.2 billion remains in the University’s general fund, a sum that is used to cover University operations, from teachers’ salaries to heating bills.

“In regard to combating tuition increases, we have already done everything possible, from expanding University businesses to rationalizing classes to streamlining maintenance operations,” Courant said. “However, we still need tuition hikes because we’re already at great risk to lose faculty to other institutions and industries.”

But to help alleviate the University’s budgetary woes, it hauls in slightly more than $800 million in revenue from external sources. Of those sources, sponsored research is by far the largest, contributing $700 million.

Courant said that for a complex institution with such a myriad of endeavors, the University is doing quite well. The University funds items ranging from undergraduate and graduate courses to applied research and health care.

Courant said the University’s expenditures are justified by the numerous benefits stemming from the University as an institution.

“We produce highly skilled workers who earn the higher wages in society,” he said. “Our higher education improves the quality of life and makes it more fun and interesting.”

But despite his defense of the University’s budget and tuition increases, Courant provided some reassurance to concerned students, saying, “I could definitely see tuition increases going back to 6 or 7 percent in a couple of years.”

Until then, students and their families will have to be patient and hope Michigan’s eventual economic recovery presages a restoration of state appropriations.