by Geoff Larcom, Published March 28, 2012
Thank you, Chairman Genetski and members of the Committee, for inviting me to testify today.
The Chronicle of Higher Education, March 23, 2012, reports that Michigan and Alabama are the only two States penalized by the federal Department of Education for cutting their higher education spending drastically. The 2008 reauthorization of the Higher Education Act requires States to spend at least as much on colleges each year as they spent on average in the previous five years. States like Michigan and Alabama who fail to meet their "maintenance of effort" lose eligibility for College Access Challenge Grants that provide financial aid, academic counseling, and assistance to low-income families.
Last year, $216 million was cut from the higher education budget for Michigan's public universities, continuing a long downhill slide in public funding over the past 20 years. We are headed toward dead last among the 50 states in support of public higher education. A college degree at a public university used to be a pathway to the middle class, but it is increasingly becoming a privilege only for those who can afford it.
The Governor's budget for FY 13 and 14 recommends over the next two years a small pot of $36.2 million in one-time monies. Four metrics are proposed to award these funds:
1) $17,192 for each additional undergraduate degree - 3-year average
2) $685 per degree in certain critical skill fields - 3-year average
3) $155 per undergraduate Pell grant recipient - 3-year average
4) Tuition restraint capped at four percent - one year only for FY 13
Eastern finds it puzzling that the first three measures use an average from the past three years, yet the fourth measure - addressing tuition restraint - does not. Over the past three years, Eastern has been the leader in tuition restraint:
Eastern's voluntary restraint has increased undergraduate tuition by only 2.47% per year, or just $20 per credit hour, over three years. The overall cost increase for Eastern students over the three-year period is approximately $1,000 less than the average increase at the other Michigan universities. Yet, a three-year average is not used in the proposed metric so Eastern is punished rather than rewarded for tuition restraint.
The 15 percent reduction in permanent base funding for Eastern last year was challenging. We eliminated 75 administrative positions, which resulted in many employees being laid off from their jobs. Yet, we made those difficult choices and did not raise tuition anywhere near the 7% cap. That leadership by Eastern is not being rewarded in this metric for tuition restraint.
Eastern has struggled - as our citizens have with their personal budgets - in these challenging economic times. Yet, we have invested $200 million in our facilities, we invested in hiring vibrant new faculty (120 in four years), and we more than doubled financial aid over the last seven years. Eastern remains a beacon of hope and opportunity for Michigan citizens to obtain an affordable degree.
My parents and grandparents paid taxes to this great State of Michigan believing they were investing in an important asset - opportunity for any child or adult to go to college and earn a degree and to be successful in this beautiful and wonderful State of Michigan. Wyoming only has one public university - Michigan has 15! What an incredible asset we have here to attract business to locate and reinvest in Michigan - we have 15 complementary, competitive public institutions that offer a wide array of degree programs that attract top students from around the world. Yet, while our State invests in prisons, we lack the vision to reinvest in higher education to reinvigorate Michigan's economy.
Eastern Michigan University: Investing in Michigan
Eastern has continued to invest in Michigan's future.
We established an Autism Collaborative Center.
We created an Information Assurance program, which prepares students for careers in cyber security and is a National Security Agency Center of Excellence. Our Information Assurance graduates have a 90-95 percent job placement rate with starting salaries between $50,000 and $75,000.
We were honored to host Governor Snyder's Cyber Security summit on our campus in October. This national event drew hundreds of business and government leaders, including Homeland Security Secretary Janet Napolitano and House Intelligence Committee Chairman Mike Rogers.
Last spring, nearly 400 southeastern Michigan high school students came to campus to learn about cyber security issues, the law, bullying, and other concerns during a special program, "Cyber Security in the 21st Century." The event highlighted what a vital and evolving area this is, as well as the need for trained professionals in the 21st century.
We're developing a new master's degree program for physician's assistants to meet the growing demand in the health care field.
Eastern is a partner with the State of Michigan in the Education Achievement Authority to help struggling schools succeed. Jann Joseph, the Dean of our College of Education, serves on the EAA board.
Eastern is the State affiliate for a dynamic nationwide program called Project Lead The Way, in which we train middle- and high-school teachers to deliver a rigorous STEM - science, technology, engineering, and math - curriculum in Michigan schools. Nearly 100 schools in Michigan already participate and the number is growing. This program is funded entirely by private and federal dollars. Michigan is the only Midwestern State that does not provide State support for Project Lead The Way.
Eastern operates the oldest, largest, and most prestigious historic preservation program in the country. A few years ago, when the State closed the Department of History, Arts, and Libraries, Eastern's historic preservation program stepped up to help. Our students now help manage the State's historic marker program.
Last year, our business students began a partnership with the State Department of Treasury to prepare FREE annual financial reports for Michigan cities and townships to meet Governor Snyder's new transparency requirements.
We love working with community colleges to ensure an affordable path that leads to employment after graduation. Eastern has 116 articulation agreements with 19 different community colleges (CC) in Michigan, Ohio, South Carolina and Ontario. We generally accept 84 to 92 CC credits toward the B.S. degree.
Students excel at Eastern
Eastern's student athletes turned in a record-setting performance in the classroom this past fall. The cumulative GPA for all student-athletes was the highest ever, at 3.16. Twenty student-athletes posted a 4.0 GPA while 64 percent posted a 3.0 or better. The football team went 6-6, with head coach Ron English being named Mid-American Conference coach of the year. The men's and women's basketball teams each won the West Division of the MAC, and the women earned a bid to the NCAA Tournament. In addition, the men's swimming team won its 30th conference title.
Our College of Business celebrated its sixth annual Ethos Week, a week of activities that featured a keynote address by Anton Valukas, the examiner in the Lehman Brothers bankruptcy case. Ethos Week is the only weeklong event of its kind in the United States.
The Undergraduate Research symposium began 32 years ago with 17 students and 19 faculty sponsors. This Friday, more than 300 undergraduate student presenters will participate in the oldest such symposium in the country.
And The Princeton Review named EMU a "Best Midwestern College" for 2012 -- the ninth consecutive year.
I am pleased now to address the specific questions posed by the Subcommittee.
1. Please describe your annual commitment to university-funded financial aid over the past four years (not including Pell grants, Michigan Competitive Scholarships, or TIP). What is the total amount committed and what are the sources of financial aid (i.e. general operating fund, endowments, donations, etc.)? What percentage of this year's freshman class received university-funded financial aid?
Year after year, Eastern has increased our institutional commitment to financial aid:
For the current academic year, Eastern has budgeted $33.6 million for institutional financial aid, which constitutes a 57 percent increase over the last five years. This is on top of other aid programs such as scholarships, federal loans, and Pell Grants. In the 2010-11 academic year, about 67.6 percent of Eastern's students received some form of financial aid, with an average award amount of $11,712. Among freshmen, 72 percent of our students received university-funded financial aid. More than 8,956 Eastern students received Pell Grants that year, amounting to about 41.4 percent of the undergraduate student body - the third highest in the State.
2. We know that to increase college degree completion in Michigan, we need to increase the number of first generation, minority, transfer, and non-traditional college students in our state. Is this part of your strategy, and, if so, what are you doing to make your university more accessible and affordable for these students?
Eastern is a leader in educating under-represented and non-traditional students. Roughly 33 percent (1,240 out of 3,721) of our new students who enrolled in Fall 2011 are first generation college students. Nearly 27 percent of our undergraduate and graduate students come from a minority background, including 20 percent who are African-American. 45.4 percent of our new students who first enrolled at Eastern in Fall 2011 are transfer students. Of those, 79.3 percent transferred from a two-year community college, which illustrates Eastern's commitment to helping community college students earn a four-year degree. Ninety percent of our students come from Michigan, and nearly 80 percent stay in Michigan after they graduate. Eastern is committed to partnering with you to educate a world-class workforce that is ready to compete in the 21st Century.
Eastern has a variety of programs tailored to helping all students, regardless of their background, earn a degree. For example:
3. What is your reaction to Governor Snyder's proposal to use a performance formula based on metrics to distribute a 3 percent funding increase to universities? Are there other metrics/criteria you would like to see considered in such a distribution? What other ways do you think we ought to be 'measuring' our universities?
This year's cut of 15 percent translated to a cut of over $11 million for Eastern. We do not carry a large unreserved balance and we do not have a large endowment. We serve Michigan students and we're voluntarily holding the line on tuition, year after year. Eastern is also investing in financial aid and science facilities. Every penny counts, and that $11 million cut hurt. It hurt a lot. Some former employees laid off are still awaiting recall to their jobs. Top leadership had 0% pay raises. We changed health care plans to achieve 80%-20% cost-sharing with our employees. We continue to cut costs.
We have two concerns with the Governor's proposed budget. First, the $36.2 million performance fund should be a permanent increase to funding, not a one-time allocation. Universities, like the State and the private sector, must engage in long-term financial planning to ensure good decisions.
Second, the proposed tuition restraint metric is flawed. If the State must force tuition restraint, it should do so consistently. The Governor's first three metrics each measure performance over the prior three years. But the tuition restraint metric only looks forward to next year. The result is that universities such as Eastern that have voluntarily restrained tuition in the past are punished. If tuition restraint must be included in the budget, the formula should include the average tuition increase over the past three years, which is consistent with the Governor's other proposed metrics.
I also support, in concept, the BLM's (Business Leaders for Michigan) call for measuring Michigan's public universities. Michigan's universities should not be measured against each other. We pursue different missions and serve different populations. Why not have each university identify what it does best or what needs improvement and establish a metric for measuring success? We're all different.
I urge the legislature not to adopt any metric - whether it's through the BLM formula or otherwise - that uses the traditional six-year graduation rate, which is known as IPEDS. IPEDS do not work. They misrepresent a university's actual success in producing graduates because the formula excludes transfer students, part-time students, and students returning to school from the workforce. Your Legislative Service Bureau and the Chronicle of Higher Education recently published information outlining the problems with the traditional 6-year graduation rate. There are better ways to measure a university's success in producing more graduates that will stay in Michigan and boost our economy. Use the number of degrees produced rather than the six-year graduation rate.
4. Where is the University with the posting of expenditures found in Section 245 of the budget? If you have completed it, could you provide a link, we would appreciate it. If not, could you please update the committee on a timeline for completion?
Eastern's financial data have long been available on-line. We recently added a new page dedicated to budget reports that organize the university's budget in detail by organization code, account code, and division. We have made significant progress and hope to soon have posted the final data outlined in Section 245, namely the actual expenditures incurred and individual employee salary information.
Most of Michigan's legislators (~75%) went to public universities for their degree, as compared to (~55%) of all state legislators nationally. You came to us for your degrees because you knew we had value to give you. Many of you want your children or grandchildren to earn a degree at your alma mater - why? Because you know in your heart that we are great public universities, a great asset to the great State of Michigan. It's not too late to step up and reinvest in public higher education in these challenging times. Protect this asset, enhance it, and preserve it. Don't let us continue to be noted as one of only two States in the nation along with Alabama that lose Federal funds for failing to maintain support for higher education. Turn the tide. As a member of this subcommittee, what will be your personal legacy to strengthen higher education?
Let us know how we can work with you to strengthen our public universities to be well positioned to educate Michigan citizens to be ready for the jobs of the future. Together, we can make Michigan strong by investing in our students and investing in our public universities. Education First!