New Report Misses the Mark on Higher Education

A new report by the Michigan League for Human Services bemoans the lack of tax money going to higher education. But the authors give a skewed view of appropriations, get some facts wrong, and completely miss the 800-pound gorilla of higher education: that increasing costs drive tuition increases.

The bottom line in Michigan is that state appropriations for higher education have been essentially unchanged since fiscal 2004, though there was a decrease prior to that. When MLHS authors complain of falling appropriations, they're crying over milk spilled six years ago.

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The authors also fault the state for the loss of financial aid programs, but the level of assistance offered by state universities has never been higher. While some state government programs were put on the chopping block, it's a pretty standard practice among universities to subsidize desirable candidates, and these amounts grew substantially. The level of financial aid offered by universities increased from $288 million in 2005 to $456 million in 2009, according to a report from the House Fiscal Agency. Perhaps that is one reason why gifted and motivated students tend to get scholarships.

More importantly, appropriations trends have little to do with the costs of higher education. Even though appropriations levels have been constant, average tuition in state universities keeps increasing. That's because the costs of higher education keep increasing, due to larger administrative staffs and higher employment costs. By keeping spending in check, universities would need less from both students and taxpayers.

The authors' conclusion that increasing state appropriations will help economic growth is equally mistaken. Doing so is actually linked with lower state economic growth. But if state legislators want to give students the option of low-cost state college degrees, they should encourage cost-savings instead of promoting waste.