High cost of higher ed cuts

August 9, 2010

Jacqui Broughton

Going to college is expensive. It’s also one of the keys to getting out of or staying out of poverty, reducing your chances of unemployment, and attaining higher income.

Unfortunately, with tuition at both two-year and four-year institutions rising faster than the rate of inflation and median household income falling, many students are finding it harder and harder to go to college. (See our new report Pulling the Plug on Michigan’s Future: Why Draining Resources Hurts Tomorrow’s Workforce.)

What’s to blame for the increase in tuition? There are several factors, such as expenses relating to health care, fuel costs and some courses being more expensive to teach than others. However, a lot of it has to do with the state, over a period of years, cutting aid to higher ed. 

Over the last eight years (2002-2010) the state’s general fund has shrunk by 12.6 percent, but state funding to community colleges, public-four year schools, and state-funded financial aid programs has dropped by 15 percent. This lack of state support, coupled with the factors listed above has caused tuition at Michigan’s four-year public institutions to skyrocket. Over the same eight-year period, tuition and fees increased 88 percent at Michigan’s four-year public colleges and 40 percent at two-year institutions.

Overall, Michigan’s investment in higher ed ranked fifth from the bottom in the nation between 2005 and 2009 and our tuition increases rank seventh-highest over the same time period.

Because of these cuts in state support, causing tuition to soar, tuition is representing an ever-increasing share of household income for families at all levels. This especially hurts families at or below the poverty level (which is $17,285 for a family of three) who have the most to gain by going to college.

However, even as tuition rises and aid programs (including many need-based aid programs offered by the state) have been cut or drastically reduced, enrollment has not dropped as more families and individuals understand the need for education beyond high school.

This is causing more students to finance their college education through student loans. In 2008, over half of all four-year graduates had student loan debt, which averaged just over $22,000, and half of all full-time freshmen took out student loans, up from just 40 percent in 2001. 

Michigan cannot afford to have its young people graduating with tens of thousands of dollars in educational  debt due to our cutting aid to the institutions that will ensure Michigan stays competitive in a changing economy.  At a time where jobs are shifting from skills-based to knowledge-based, is it worth cutting off aid to the institutions that invest in our future?

— Jacqui Broughton

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Will Michigan be ready for 2018?

July 8, 2010

Peter Ruark

We at the Michigan League for Human Services have written extensively about the need for Michigan to invest in postsecondary education and training. A new report from Georgetown University called Help Wanted provides projections for future job demand that underscore this need.

According to the report, the number of Michigan jobs requiring postsecondary education will grow by 116,000 between 2008 and 2018, while jobs for workers with no education past high school (including dropouts) will grow by only 22,000.

In Michigan, 62 percent of jobs in 2018 will require some postsecondary education and 28 percent will require a bachelor’s or graduate degree. These figures are close to projections for the nation as a whole.

Jobs that require some level of postsecondary training (such as an associate’s degree or a recognized vocational credential) but not a bachelor’s degree are called “middle skill jobs.” This is where a large part of the job growth will be in the next several years.

What is driving the increasing need for postsecondary education? According to the report, it is technology. Throughout our country’s history, technological development has favored workers with more education, and in turn, demand for these workers grows as the technology spreads throughout the economy.

So what are Michigan and the United States doing in light of all this? The good news is that No Worker Left Behind has been very successful in its first three years. It has enrolled more than 131,000 workers, and 75 percent of the 58,000 program completers have found new employment or retained a job that had been at risk.

However, in contrast to the $40 million in state funds that Gov. Jennifer Granholm recommended for its first year, the state only invested $4.5 million in No Worker Left Behind this fiscal year, with the vast majority of funding coming from the federal government.

This may have worked fine when there was federal money to be had. But, according to the Lansing State Journal, federal funding will be cut by $92.4 million as the need in other states becomes greater and as stimulus funds begin to dry up. Because workers already in training programs will receive highest priority for the remaining funding, No Worker Left Behind will not be able to enroll many new trainees in the near future.

There has to be serious monetary investment in adult learning by both the state and the nation if we are going to have a workforce that can meet the job demands of the upcoming decade. If Michigan plans to be competitive, it must make sure it has the money to upskill its workforce when federal funds are scarce.

Right now our state doesn’t have the money. And though it sounds like a broken record to say so again, we won’t have the money until we devise a way to increase state revenues.

— Peter Ruark