Is Michigan's higher education system worth the high cost to taxpayers? The Mackinac Center for Public Policy recently explored this question at an Issues and Ideas forum.

“Has the Ivory Tower Lost its Luster? Rethinking Higher Education in Michigan,” featured three panelists to discuss the problems in Michigan’s higher education system and some possible solutions.

Michigan’s 15 public universities are not a system of collaboration but rather a system of aggressive competition that exploits brand awareness, said Dr. William Volz, distinguished service professor of business law and ethics at Wayne State University. This system is slow and resistant to change.

Not all graduating seniors go on to college. Among recent high school graduates ages 16 to 24, 57.6 percent of men and 65.3 percent of women are enrolled in college, according to the US Bureau of Labor Statistics. Michigan spends more than $11,000 per year on each student in college, but nearly half the taxpayers providing that money will not attend college themselves.

Michigan’s fifteen public universities have lost ten percent of their student body over the last twelve years, Volz said. Twelve of those universities have suffered substantial enrollment losses. Regional universities accounted for much of the decline, while enrollment at the University of Michigan and Michigan State University expanded dramatically thanks to those schools’ high brand awareness. The value of the large universities’ degrees is what draws students in, and the prowess of their athletic programs is a marketing lure. Additionally, the larger universities have begun building extension centers in the metropolitan areas to capture tuition revenue.

Dr. Andrew Gillen, a research fellow at the Cato Institute’s Center for Educational Freedom, spoke on the economics of higher education and how our government could better fund these universities. State appropriations and tuition revenue make up most of the total funding of universities. The long-term upward trend in educational revenue means colleges are richer than they were in the past decade. State funding also increased steadily over the years. Spending in Michigan has not increased as rapidly as in other states, but the state still spent $3.1 billion in fiscal year 2023, the highest outlay ever.

Lawmakers believe they can buy lower tuition by increasing state appropriations, but Gillen pointed out that higher spending on college by the taxpayers does not reduce tuition.

How should funding for higher education be distributed? Gillen says it would be better to fund students directly through financial aid than to appropriate more money to the universities. Michigan, however, does most of its funding through appropriations and has decreased its financial aid over the last 20 years.

Former state Sen. Tonya Schuitmaker, co-director of the Michigan Political Leadership Program at Michigan State University, expanded on the economics of higher education.

“We want an educated society,” Schuitmaker said. “So there is a good place for higher education in our society. But how do we get the best bang for our taxpayer dollars?” She suggested that colleges and universities put a transparency icon on their websites that shows what they are spending their money on. When tuition revenue is down, funding should be cut.

Schuitmaker noted that the state Legislature can appropriate funds but that lawmakers cannot set policy, because under the Michigan Constitution, the public universities are autonomous. Schuitmaker applauded the Michigan Achievement Scholarship, in which low-income students can receive up to $5,500 toward tuition at a public university.

During the Q&A, Gillen suggested that Michigan and other states emulate the Federal PELL Grant program, which has proven to be  effective system at getting lower-income students the money they need to complete college. He pointed out that while the state continues to focus on giving students access to college, graduation rates remain low.

The panelists also discussed the purpose of a university and the best way to think about the university system. Individual universities all seek to become the best schools they can be, the panelists agreed, but they must weigh the benefits they offer. Is the purpose of education to get a job? Is it to make connections and form relationships? To make a living? Or is it to open people's minds to great thinkers who have come before us? 

After considering the decline in enrollment rates, decreased financial aid, and low rates of graduation, the panel agreed that Michigan needs to rethink its higher education system.

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