There's an old adage that, to make money, you have to
spend money.
When it comes to boosting enrollment, spending a little
more on financial aid appears to be the new strategy at
Eastern Michigan University.
The University has plans to budget $15,607,798 for financial
aid in 2006-07, up from the current year's $14 million.
The financial aid budget is projected to rise to $16,555,467
in 2007-08. With the increased dollars, the goal is to
be able to offer more students some form of financial aid;
the theory being that if you give a student an extra incentive
to attend EMU, the University will reap the rewards by
receiving tuition dollars it would otherwise lose out on.
 |
Fallon |
That strategy was unveiled by EMU President John Fallon
during an open budget forum, "Conversations With the President" in
the McKenny Union Ballroom May 11. The forum focused on
the University's "fire-breathing budget dragons," which,
in addition to financial aid and enrollment, includes funding
the Michigan Public Schools Retirement Act, or MPSERS,
as its better known.
"We've lost students who could have been persuaded to
come here with a little financial aid," Fallon said. "The
student may not be able to contribute much. So, for our
net revenue, it may not be substantial, but it's better
than nothing."
It's important to increase the University's net revenue
by bolstering enrollment rather than increasing the price
tag, said Fallon, who added the ability of EMU students
to pay for an education here is reaching its ceiling.
"We cannot ratchet up tuition 10 percent or 13.5 percent,
like last year. That will only slam the door in the face
of students," Fallon said.
By keeping tuition increases to a minimum and offering
more students some form of financial aid, Fallon foresees
the University meeting enrollment goals and improving retention
numbers. He added that retention can be improved by not
only offering some form of financial aid, but providing
an award that is renewable for, say, students who maintain
a 3.0 GPA or above.
Budget Timetable
The following is the timetable for Eastern Michigan
University's FY2007 budget, as provided by EMU
President John Fallon in his May 26 periodic update.
Development of FY07 operationals revenue assumptions June
1
Determination of existing and new FY07 revenue
needs June 1
Determination of budget modifications and reallocation
procedures June 16
Recommendation/adoption of FY07 continuation budget June
20
Board of Regents budget workshop July
21
Recommendation/adoption of FY07 operatonal budget July
21
Budget made available to the University community July
21
Source: President Fallon's May 26 periodic
update |
"If we increase retention rates, we increase our graduation
rates. A degree is the coin of the realm, what people are
working here for," Fallon said.
According to a June 6 report from admissions, fall 2006
enrollment figures currently show 1,737 new FTIACS, 527
new transfer students and 263 new graduate students.
As EMU crafts its 2006-07 budget, University officials
also have to take into account how much money is needed
to cover MPSERS.
In fiscal year 2006, MPSERS cost EMU approximately $5.5
million, equal to a 5.5 percent tuition increase. That
number is up from approximately $4.8 million in FY 2005,
Fallon said.
"We have no control over it. This is a set of runaway
costs," Fallon said.
The state of Michigan adopted MPSERS in 1945 to provide
a pension for teachers in public schools and seven universities,
including EMU. The system, paid for by the state, remained
pretty much unchanged until 1975, when MPSERS was amended
to include the cost of healthcare for state educators.
"In 1990, the full cost of MPSERS fell to the University.
We were stuck," Fallon said.
Currently, EMU has 440 current active employees enrolled
in MPSERS, according to Jeanette Hassan, director, benefits.
In addition, MPSERS requires the University to pay for
another 250 employees that would have joined MPSERS had
they been eligible to do so.
Despite the budget drain, Fallon said the University will
not "tinker" with MPSERS. He did say he has talked with
presidents at Ferris State and Western Michigan. The three
are asking legislators in Lansing to eliminate MPSERS out
of any funding equations for per student costs. Fallon
noted that, for the seven universities in MPSERS, the percentage
of annual state appropriations designated toward MPSERS
has increased from 8.3 percent to 12.4 percent.
"That is a large cost and getting larger," Fallon said.
