Styling himself as the potential “education governor,” Democratic gubernatorial candidate Mark Schauer has seized on several issues in higher education policy as a part of his campaign platform.
At the heart of most educations are state appropriations, where incumbent Republican Gov. Rick Snyder has had a mixed record. Snyder cut higher education funding by 15 percent during his first year in office, then approved increases in the following three years.
Schauer has criticized those cuts and said he plans to restore funding to the state’s universities and colleges if elected.
In an interview with The Michigan Daily earlier this month, Schauer said he sees a number of benefits to increasing funding for higher education.
“Budgets are a reflection of our priorities and our values,” he said. “And higher education is a priority and value of mine because it will help strengthen our economy and help us grow, become more competitive and create faster economic growth, lower unemployment and better wages for people. It benefits us all. It benefits the state.”
In 2011, the Snyder administration cited an acute budget shortfall and a push for fiscal responsibility as reasons for the 15-percent cut. The budget also saw cuts to tax credits for low-income workers and the end of Michigan’s subsidies to movie production companies filming in the state. Following those cuts, there were increases in higher education funding of 3.1 percent in 2012, 2.2 percent in 2013, and 6.1 percent in 2014.
During the fiscal year 2015 budget announcement, then-State Budget Director John Nixon said the cuts weren’t necessarily a permanent decision and the eventual goal was to bring funding back to pre-2011 levels.
Kurt Weiss, communications director for the state’s Department of Technology, Management and Budget, confirmed in an e-mail interview that this goal is still on track, though he added that specific levels of funding for programs like higher education can’t be determined until state revenue forecasts for the year are released.
“While at this point we can’t give a specific timeline as to when full restoration of higher education funding will be achieved because we have not yet seen the revenue forecasts, the governor will continue to make strategic investments in education given the revenues that are available,” Weiss wrote.
The University’s Ann Arbor campus lost $47.5 million in funding due to the 2011 drop. The cuts resulted in a 6.7-percent tuition increase for in-state students, as well as changes to class sizes, the closing of several academic centers and other downsizing measures.
Snyder’s campaign office was not available for comment after multiple interview requests from the Daily.
Nationwide, fiscal year 2013 reflected a boost in government higher education funding, according to the State Higher Education Executive Officers Association. State and local funding grew by 0.7 percent after years of reduction, though this level growth was not as strong as in other years of economic recovery.
“These data indicate that recovery has begun, albeit more slowly than after the recession of the early 2000s, when educational appropriations per student increased 5.0% during the first year of recovery,” SHEEO’s fiscal year 2013 report read.
SHEEO reported other nationwide data that points to declining federal funding in the midst of soaring tuition costs. For each full-time student, education appropriations went from $8,579 in 1988 to $6,105 in 2013, which is $85 greater than the lowest data point. Meanwhile, net tuition revenue per full-time student increased from $2,685 to $5,475 — the highest tuition rate in the study.
Back in Michigan, Schauer said he has also developed several ideas regarding student debt.
Snyder has approached student debt by encouraging dual-credit opportunities — which allow students to earn college credit in high school — and through incentives for universities to not raise tuition. His primary initiative has been to tie some state funding to a university’s ability to keep tuition increases below a specified cap. Schauer said two of his primary approaches are the creation of a student loan refinancing authority and an increase in need-based aid to lessen student debt.
Refinancing refers to the process of taking out a second loan at a lower interest rate, typically due to factors such as market fluctuations or changes in individual credit score. It allows paying off the original loan with higher interest rates. The practice is available for other types of loans, such as mortgages, but not for many types of student loans.
In California and Wisconsin, where similar refinancing authorities have been proposed, policymakers have suggested the establishment of funds to protect loan issuers against losses. Other options include purchasing loans from their original lender and then backing the new, lower-rate loans themselves.
Schauer said his vision of a student loan refinancing authority for Michigan could function as a “public-private partnership.”
“The student loan refinancing authority doesn’t necessarily need to cost anything,” he said. “It could be a way of investing state pension funds, or pooling or aggregating other private sector dollars.”
According to Schauer’s plan, need-based scholarships would be initially funded by savings from increased efficiencies in the way government is run through audits of every department and the cancellation of several controversial government contracts.
Schauer added that he believes that in the long term, the increase in aid will produce state revenue.
“It’s not a zero-sum game,” he said. “But in the short term, it will take a commitment of resources. What I’ll start with is by cutting some of the wasteful programs and contracts within state government.”
He referenced Aramark, a prison food services company that took over the contract for Michigan’s prisons in December 2013 from state employees, as one contract he would eliminate. The company — which currently operates under a $145 million contract — has faced multiple complaints of inappropriate employee conduct and food quality issues.
Like Snyder, Schauer has promoted higher education as a way to energize the state’s economy through building knowledge capital in the state. He also pointed to a post-graduation factor — namely, whether Michigan’s communities encourage graduates to stay — as important for the overall state discussion about supporting higher education.
As of 2013, the last year for which data was available, roughly 37 percent of the class of 2012 left the state after matriculation, according to a study by the Detroit Economic Regional Chamber.
“You know, there is a brain drain here in Michigan,” Schauer said. “We have the ability to use some of these policy tools to help address that brain drain, but there are a number of other areas as well. We need jobs. And we need healthy, livable dynamic cities that provide quality of life and attract smart, talented creative people, including our college graduates.”