A nearly 6-percent tuition increase for undergraduate students at the University next year is, it seems, what passes for good news in these parts. Thanks to a 3-percent increase in state appropriations after years of cuts, the University was able to avoid a double-digit increase similar to last year’s 12.3-percent tuition hike.

Sarah Royce

Yearly tuition increases far above the general rate of inflation, however, pose problems for the University. Though the University deserves credit for its commitment to financial aid, sticker shock from high tuition deters many students from even applying. The state, for its part, has to commit to greater and more consistent funding to its public universities if a quality education is to become accessible to everyone in Michigan.

The budget approved by the University Board of Regents on Friday includes a 5.5-percent increase for both in-state and out-of-state undergraduates in the College of Literature, Science, and the Arts. Across all undergraduate programs, the average increase is 5.8 percent. The news could have been far worse, and its effects will be softened by the University’s commitment of an additional $5.7 million to financial aid.

There is danger, however, that state legislators, seeing tuition increases at state universities despite an increase in state funding this year, will be hesitant to support increases in the future. But, the fact is that inflation in higher education is always greater than inflation in the economy as a whole.

The causes are complex and include expensive research infrastructure, the need for competitive salaries to retain top-notch faculty and something economists call Baumol’s cost disease – the existence of greater inflation in fields, such as education, where a reliance on human interaction prevents productivity increases from offsetting increased wages over time. (It takes just as much of a professor’s time to lead a 20-person seminar now as it did 100 years ago, despite the rise in the cost of living and thus the professor’s wages).

The situation is further complicated by the long-term decline in state support. In the past, state appropriations accounted for the majority of the University’s general fund. Over recent decades, however, that share has fallen drastically, and increasingly, the costs of operating a world-class research university have fallen on students and their families. The situation has not been helped by state cuts over the past four years. Despite this year’s small increase, the University is still receiving $37 million less from the state than it did in 2002.

For the University, this means that low-and middle-income students are far less likely to even bother applying. Seeing the nominal tuition figure, less-affluent parents may discourage their children from applying, figuring that four years of tuition is far beyond their means, even though, thanks to the University’s innovative financial aid programs, this often isn’t the case. The University needs to make its commitment to financial aid crystal-clear in its application materials and through its recruitment process. The opportunities provided by an elite public university mean little if high tuition leaves the University as merely a playground for children of the rich.

The state, meanwhile, ought to boost its commitment to its public universities drastically if it’s serious about building the kind of educated workforce needed to ensure Michigan’s economic future. The state’s traditional dependence on the auto industry is already leading it to economic obsolescence – and Chinese cars haven’t even hit the streets yet.

One expert, former University President James Duderstadt, suggests increasing funding 30 percent above inflation for the next five years. Given political realities in Lansing, that might not be possible, but at the very least, the state must provide a consistent commitment to what increases it can afford and not return to the cuts that characterized the past four years.

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