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House Higher Education Appropriations Subcommittee

 

Good morning,

Thank you, Chairman Pscholka and Representatives Walsh, MacGregor, VerHeulen, Singh, McCann, and Kandrevas for giving Eastern the opportunity to speak to you today.

Affordable and Accessible

Affordability and accessibility are synonymous with Eastern Michigan University.

Our role as a historic 163-year old large public university is to serve Michigan citizens by providing an affordable, accessible high quality college education.

Eastern Michigan University is the statewide leader in tuition restraint. Our tuition has increased only $32 per credit hour or 2.86% per year over the last four years, which is the lowest increase among the State's fifteen public universities.

Eastern was a nationwide pioneer when we froze tuition, room, and board in 2010 with 0%, 0%, 0% increases. We took this bold and unprecedented step because, in the midst of the global recession, we felt it was vital to keep higher education affordable and accessible to Michigan families.

While leading the state in tuition restraint, Eastern has also increased institutional financial aid by 78%, from $21.4 million to $38.1 million, over the last six years. This dramatic increase in funding supports scholarships and awards that supplement federal financial aid and private loans.

Keeping higher education affordable and accessible is personal for me. I grew up in rural Michigan and attended a one-room schoolhouse before earning a bachelor's degree from Central Michigan and my MBA and PhD in accounting from Michigan State. I took a test in high school and the State of Michigan taxpayers funded a competitive scholarship for me that paid my tuition & fees. Eastern is committed to working with the legislature to give the students of today and tomorrow the opportunity to work hard, earn a college degree, and become productive taxpaying residents of Michigan. Our role is to serve Michigan.

Investing in Michigan

In addition to keeping college affordable, Eastern is also making the investments necessary to preserve our mission of "Education First." Our student body of more than 23,500 ranges from 18-year olds just out of high school, to returning veterans, to part-time students returning to school to finish their degree, to young adults who are the first in their family to attend college.

I'm pleased to inform you on key initiatives designed to meet the Michigan workplace needs:

We are opening a new graduate program to train physician assistants, a rapidly growing field that pays high wages. We expect to begin enrolling students in the Fall of 2014, and recently signed a memo of understanding with nearby St. Joseph Mercy Hospital, which will operate a simulation lab for our students.

Eastern's Information Assurance program is a National Security Agency Center of Academic Excellence. Information Assurance encompasses the scientific, technical, and management disciplines to ensure computer and network security.

Eastern's students are in high demand, and our program boasts an employment rate upon graduation of nearly 100%. Eastern hosted Governor Snyder's inaugural Cyber Security Conference in 2011, and we are proud to host the State's new Cyber Range, which is a high-tech facility where public and private entities can test cyber defense systems. The recent news of Chinese cyber attacks against our governments and American companies gives even greater urgency to this field of study.

Eastern continues to be a draw for Michigan's returning veterans. We offer all veterans in-state tuition, regardless of their residency. For the third consecutive year, we were named a "military friendly" university by GI Jobs magazine. We are also proud to have been selected by the Michigan Department of Military & Veterans Affairs to host a new outreach center for southern mid-Michigan to help veteran college students access their federal and state veteran benefits.

Eastern recently partnered with the Michigan Small Business and Technology Development Center to offer a free seminar in Livonia, in Representative Walsh's district, to help entrepreneurial veterans learn how to start their own business.

Eastern is expanding our faculty ranks in high-growth areas to ensure that students have access to the best teachers in their fields. 18 new faculty joined us last Fall and I authorized 37 new faculty searches for Fall 2013. Eastern has authorized 157 searches for new faculty in the past four years.

Being accessible includes strong partnerships with Michigan's community colleges to enable credits to transfer from a community college to a four-year institution. Eastern has over 130 articulation agreements with community colleges that clarify the path to a four-year degree with 84 to 92 credits taken at the community college, saving the student time and money.

Eastern's investment in faculty, financial aid, facilities, and academic programs has resulted in increased enrollment and also the number of graduates.

Over the last five years, enrollment has increased 7% to 23,547 students from 22,027 in 2008.

Last Fall, Eastern enrolled our largest undergraduate class of 5,076 students in our 163-year history. The incoming freshmen class of 2,595 students was the largest in a decade, which represented a 21 percent increase from the prior Fall's freshmen class. Our incoming freshmen came from 81 of Michigan's 83 counties, our minority enrollment increased by 24 percent, and the number of freshmen with a high school GPA of 3.5 or higher rose by 36 percent. The incoming students were more diverse and better prepared.

Our investment in upgrading campus housing is paying off. On-campus residency in Fall 2012 rose 19 percent over the previous Fall, and is at its highest rate in nearly ten years.

Eastern is graduating more students. 4,460 students are expected to graduate this academic year, representing a 9% increase over last year and a 27.7% increase in just three years.

Nearly ninety percent of Eastern's students are from Michigan, and nearly eighty percent stay in Michigan after graduation.

Affordability and access are core to our role as a large public university located in southeast Michigan. Eastern serves the needs of our region and our State. Last October, Deloitte did a market analysis for Eastern. The market analysis identified 183 high-wage, high-growth occupations. Half of these occupations are in education and health care, while another quarter are in positions reliant on science, technology, engineering and math (STEM). STEM+ occupations will grow 30% faster than non-STEM jobs in the next decade.

Eastern is preparing students in the high-wage, high-demand occupations; 72% of our bachelors degrees, 70% of our master's degrees, and 84% of doctoral degrees are in these high-wage, high-demand fields. Eastern is preparing students for top jobs in high demand.

Cutting Costs

Eastern continues to lead in cost reduction efforts to keep tuition affordable:

In the past two fiscal years, we eliminated 111 administrative positions, which included forty layoffs, saving $5.6 million in wages and benefits.

Eastern's employees now share ~20% of health insurance costs.

Eastern recently restructured some of our debt, saving approximately $250,000 per year.

By upgrading facilities and negotiating good rates on natural gas, we've reduced our energy costs by over $4 million per year since 2009, even as enrollment and housing occupancy have increased.

Not surprisingly, we received the best score this year in the budget performance metric that measures a university's spending on administrative overhead.

The Governor's Proposed FY 2014 Budget

Finally, I'd like to offer a few comments regarding Governor Snyder's budget proposal.

Base Funding

We support the Governor's proposal to include performance funding and tuition restraint from 2013 in our appropriation for 2014, but strongly request that any increase in funding be made permanent. We also applaud the proposed increase in total funding for higher education by $30 million, but far more is needed to support our students financially. Eastern has consistently proven that we will reinvest the State's resources in lower tuition.

Pell Grants

We support the Business Leaders for Michigan's recommendation to add a performance metric that measures Pell Grants. Pell Grant students are, by definition, low-income. Many of these students are the first in their family to attend college. These students can't be left behind.

Six-Year Graduation Rates

The Governor again proposes using the six-year graduation rate as a performance metric. The six-year graduation rate tracks only those students who are full-time, first-time undergraduate students, and who begin and end their education at the same institution.

Students who transfer from one university to another or "stop out" don't count.

Students who transfer from a community college to a university don't count. In the Fall of 2012, nearly 8,000 of Eastern's students had transferred from a community college. Our second largest partner is Schoolcraft College, in Representative Walsh's district, which was attended by over 1,300 of Eastern's current students. But the six-year graduation rate doesn't count these students when they earn their bachelor's degree from Eastern.

Veterans who attend college part-time, or who stop and start their education between deployments, don't count.

Students who come back to college in mid-life to retool for a new career don't count.

Students who start at a university right out of high school, take off just one semester due to a medical or financial situation, and then return to that same university and graduate within five years don't count.

These flaws were outlined in a memo produced by the Legislative Service Bureau in 2011. Testimony before the Community College Appropriations subcommittee last month detailed how the number of Michigan students who begin at a community college and transfer between universities is dramatically rising. But the six-year graduation rate ignores every one of these students. Eastern serves its region and state – over half of our incoming students have some college but no degree and will not be counted in our graduation rates. Yet we are graduating more students than ever – graduates who stay in Michigan!

Why are we using a metric that discourages universities from reaching out to veterans, punishes partnerships with community colleges, and is inconsistent with the Governor's call for more a flexible and seamless learning system? I urge the House to stop using this flawed metric and to shift those dollars to the total number of degrees produced, which measures what really matters: graduating more students!

Tuition restraint

The tuition restraint formula penalizes universities that have voluntarily restrained tuition. All of the performance metrics proposed in the Governor's budget look backward over a three-year period. Tuition restraint should also use a three-year average to reflect consistent tuition restraint over time. Eastern Michigan University has the lowest tuition increase over the last three years, and the last four years, because we were voluntarily restraining tuition before the State provided any incentive for doing so. Yet Eastern received the smallest tuition restraint award in the 2013 budget. Clearly the formula is broken.

MPSERS

As you know, seven universities, including Eastern, are part of a group known as the "MPSERS 7". We were part of MPSERS until 1996. Since 1996, all of our new employees enroll in a defined contribution plan which works well and saves money. But about 13 percent of our employees remain in MPSERS and our costs are increasing dramatically. I urge you to apply to the "MPSERS 7" the cap on the MPSERS contribution rate of 20.96% that applies to K-12s and community colleges. This solution is fair and it will save us money that we have proven, time and again, we will reinvest in making Eastern affordable and accessible.

Conclusion

The data supporting the case for investing more State resources in higher education are so compelling they are worth briefly restating.

In January 2013, the nationwide unemployment rate for individuals without a high school diploma was 12%, for high school graduates it was 8.1%, for those with an associate's degree or some college it was 7.0%. But the unemployment rate for those with a bachelor's degree or higher was an astonishingly low 3.7%.

There is a direct correlation between education and income. Minnesota, for example, has the highest percentage of college graduates in the Midwest and the highest per capita income in the Midwest.

The Governor has noted that Michigan has 70,000 openings for high-skill, high-wage jobs because our workforce lacks the higher education necessary to fill these positions. These are high-paying jobs that, if filled, would generate tax revenue in our communities. Eastern's recent market analysis shows Eastern produces graduates for these high-wage, high-growth occupations.

Eastern is committed to an accessible, affordable first-rate education that serves Michigan citizens. We are a leader in tuition restraint and cost containment.

Thank you.

 

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