Editorial: Elevate higher ed

New aid formula helps, but there's more to do

by The Editorial Staff Detroit Free Press February 24, 2008

Gov. Jennifer Granholm has been talking about the critical importance of higher education to "the next Michigan" ever since she took office in 2003. And yet state support for public universities has continued to shrink while tuition has kept going up.

This year, the governor has proposed a welcome 3% increase in aid to higher education and believes she has, at last, the budget to deliver it. But the proposed boost comes with a formula that's pegged to what the universities can deliver for Michigan. This makes sense and is overdue. Accountability for precious public funds in these tough economic times has to extend to the universities, even with the autonomy they enjoy.

That said, 3% will hardly make up for past cuts. Adjusted for inflation, the state's 15 public colleges actually received more help from Lansing in 2002. Tuition increases last fall, meantime, were again among the highest in the nation.

Central Michigan University may be the single worst example of the impact of eroding state aid.

Two years after launching an innovative plan to guarantee for five years the tuition of its incoming freshmen, CMU had to back off this month, no longer able to afford it.

Granholm's formula would boost CMU's state support by 2.3%, or $84 million, nowhere near enough to keep the guarantee in place.

Find long-term answers

In the current economy, the Granholm proposal is about the best Michigan can do.

But longer term, there simply has to be a better way. Michigan cannot keep pushing the importance of college and then allowing its families to be priced out of it. State funds used to cover two-thirds of the cost of a college degree; now it's less than one-third.

Meantime, the percentage of family income swallowed by tuition has skyrocketed. For families with students at four-year universities, the cost in 2006 without financial aid was about 36% of an average household income in Michigan; even at community colleges, it was almost 25%.

Although the schools have done a commendable job of finding ways to help deserving students with loans, scholarships and grants, Michigan was still graded F on affordability in the most recent National Report Card on Higher Education.

And finances are a big reason why degrees aren't getting completed. Despite the governor's ambitious rhetoric about doubling the number of college graduates in the state, Michigan has not since 2000 advanced above 34th place among the states in percentage of adults over age 25 with college degrees -- just 24.4% of the population, according to Michigan Future Inc.

It's clear that there is a direct relation between the education and income levels of regions and states. Where people know more, they make more. Michigan certainly has the institutions to improve its standing. The culture change required to see the value of higher education is taking hold, too, now that good-paying factory jobs are vanishing by the score.

Knowledge and businesses

Under Granholm's new plan, each university would receive a minimum level of aid with more allotted based on research that brings in money or generates economic activity, the types of degrees being completed and the percentage of low income students enrolled.

While the three largest universities, Michigan, Michigan State and Wayne State, would command the lion's share of research dollars, having a larger percentage of low-income students enrolled would be worth up to 35% more aid to the state's other 12 universities, a full 10% more than the Big Three.

Meanwhile, math science and engineering degrees are weighted four times higher than liberal arts degrees, qualifying schools for a 50% aid incentive.

To the extent this formula drives the universities to bring course offerings and assistance programs in line with state needs, it can only help Michigan improve its attractiveness to the knowledge-based employers in the growth businesses of the 21st Century.

It's an unfortunate convergence that Michigan has such a crying need to increase its support for higher education at a time when the state's fiscal position makes it impossible to recover lost ground. So the key, in this time of economic transition, must be smarter spending of every available dollar. The governor has a plan for that. If the Legislature goes along, the universities have even more reason to deliver a visible return for Michigan on the public investment they receive.