Category Archives: Budgets

Analysis: College costs shift to families

Posted on October 28, 2011 by | 11 Comments

I’m not sure if this is the article that Cheryl is referring to in her comment, but it’s a pretty good one anyway:  “Analysis:  College costs shift to families,” which I found on some kind of CBS news web site but which I think has appeared a number of places since it’s a AP wire story.  I think.  Anyway, I think it argues pretty effectively that over the last couple of decades, Americans have come to believe in increasing numbers that college was “essential” to be successful, and at the same time, states have defunded higher education.  Increased demand combined with lower public support equals higher costs.

The EMU connection comes at the end where we learn about Leah Shutes, “a third-year student working toward a degree in journalism,” who is already $60,000 in debt.  I’m not sure what Shutes situation is and I don’t want to make too many judgements, but that seems like way too much borrowing to me.  I do think this passage at the end sums up things fairly well:

The Eastern Michigan campus, serving a region where the economy struggled throughout the 2000s, may not appear at first glance much different than a decade ago.

But roughly twice as many students, and about half of all enrollees, now receive Pell Grants. That’s indicative of more federal aid but also more struggling students; most Pell recipients come from families earning less than $50,000.

A recent college health survey showed increased student stress. More students are trying to make do without purchasing textbooks. Administrators say students are now working two and three jobs instead of one, which affects their work.

“It’s a vicious cycle,” said Bernice Lindke, vice president of student affairs and enrollment management.

Ten years ago, EMU enrolled 24,300 students and received $90 million from the state of Michigan. Last year it had slightly fewer students and got roughly $65 million. Meanwhile, tuition has doubled. The university used to get one-quarter of its budget directly from students; now it depends on them for three-quarters.

 

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Posted in Budgets, In the media..., Student Life

“Obama Unveils Plan for Student Loan Borrowers”

Posted on October 27, 2011 by | Leave a comment

I heard this story on NPR yesterday, though this text is from the associated press.  And of course, it’s been reported elsewhere.  Here’s a snippet:

Obama’s plan will accelerate a measure passed by Congress that reduces the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent. He will put it into effect in 2012, instead of 2014. In addition, the White House says the remaining debt would be forgiven after 20 years, instead of 25. About 1.6 million borrowers could be affected.

He will also allow borrowers who have a loan from the Federal Family Education Loan Program and a direct loan from the government to consolidate them into one. The consolidated loan would carry an interest rate of up to a half percentage point less than before. This could affect 5.8 million borrowers.

Student loan debt keeps becoming a bigger deal–according to the radio version of the story reported  the other day, student loan debt is now larger than credit card debt, and it is one of the frequently mentioned complaints by the Occupy Wall Street movement.  So this might help, at least some students.  Though student loans are complicated.

When I was in graduate school, I borrowed money a couple of times (my undergraduate degree was cheap enough that with my parental support and work, I didn’t need to go into debt).  Some of that borrowing was money I really did need to live, but I will freely admit (with a couple decades of hindsight) that some of that money really was frivolous and was the kind of borrowing made by a 20-something who was thinking of the “here and now” and not of the interest rates and the future.  I am pretty sure that the same is true for our current students:  that is, while a lot of (most?) the borrowing is completely legitimate, I suspect that some of it is about supporting a lifestyle rather than an education.

And when I was borrowing money, there weren’t any of these private lenders giving out money in the form of student loans with crazy-high interest rates.  It seems to me that this is another example of bankers gone wild in the last 20 years.

By the way, I finished my PhD in 1996 and I am still paying off the last trickle of student loans.

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Posted in Administrator Life, Budgets, In the media..., Student Life

Budget problems worsen (and I like what BOR member Morris said)

Posted on October 19, 2011 by | 15 Comments

It’s been mighty mighty busy around here with my day job as of late, so I was happy to see a loyal reader send me a couple of links about ongoing budget problems at EMU, notably this annarbor.com piece, “EMU’s budget shortfall expands to $4.6 million.”   Here are the opening paragraphs:

EMU Chief Financial Officer John Lumm told the EMU Board of Regents on Tuesday that the shortfall, which was reported at $1.7 million at last month’s regents’ meeting, had ballooned to $4.6 million by Sept. 15.

When he first reported the shortfall at a Sept. 20 regents meeting, Lumm originally said the gap could grow to $5 or $6 million by the end of the fiscal year, which isn’t until June 30, 2012.

The university is developing a plan to cut back costs and accommodate for the potential deficit, Lumm told the regents Tuesday .

I’ve got two ideas for cutting costs right off the bat:  first, travel back in time and raise tuition enough to cover the expenses you knew you were going to incur.  As I said before and I’ll say again:  EMU probably would have laid off people over the summer no matter what, but had we raised tuition by 5% or 6%, we would likely not be in this situation now.

Here’s another idea:  maybe it’s time to fire Lumm.

One of the things that comes up in this article is some of the problem with EMU’s finances has to be laid at Lumm’s doorstep.  And Board of Regents member Mike Morris pointed this out.  Here’s a quote:

EMU has $87.4 million in investments. About 37 percent of that amount —or $32 million— is cash or short-term investments. Another 17 pecent constitutes moderate-term investments and the remaining 46 percent is long-term investments.

Morris contended that the university should more heavily invest some of the money it has in cash and short-term investment, which have low return rates. He highlighted the University of Michigan and Michigan State University invest more aggressively and see greater returns.

“I don’t know why we have so much money in cash and short term investments,” Morris said.

Why indeed.

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Posted in Administrator Life, Board of Regents, Budgets, In the media...

Not surprisingly, 3.65% was not enough to cover expenses

Posted on September 21, 2011 by | 20 Comments

At least that’s what I would have had for the headline for this annarbor.com story, “EMU’s budget shortfall could grow to $6M, regents told.”  Here’s a quote:

Eastern Michigan University enrollment levels declined this year, ending the school’s two-year growth streak and contributing to a growing budget shortfall.

EMU is experiencing a $1.7 million shortfall so far this fiscal year, EMU Chief Operating Officer John Lumm reported at a Board of Regents meeting Tuesday afternoon.

The gap, Lumm said, could grow to between $5 and $6 million by the end of the fiscal year.

The reasons include the enrollment decrease and a drop in investment income.
“The challenges we face are really twofold: The enrollment shortfall is one, the second one, which is way too early to draw any conclusion on, is the investment income,” Lumm said. “Investment income is tracking down year to year. The markets are down.”

The markets are down?  That’d make sense if EMU were an investment bank, but since EMU is a university which derives most of its resources and income from tuition, I somehow think that the artificially lowball “let’s throw some people under the bus” tuition increase might have something to do with it.

One more thing from this article:

“Obviously this is a pretty discouraging report,”[Board of Regents Chairman Roy] Wilbanks said. “If this track continues, the board is going to have to give some type of budget amendment.”

Lumm goes on to suggest that this “budge amendment” might mean more cuts, but as I said back in June, I have a feeling this 3.65% tuition increase is temporary.  Look for a bigger hike in Winter term, folks.

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Posted in Board of Regents, Budgets, In the media...

Enrollment remains flat despite EMU’s efforts at ridiculously low tuition

Posted on August 28, 2011 by | 9 Comments

That’d be my headline to this annarbor.com story.  We’ll see how it plays out this school year, but after 0/0/0% got us nowhere and after this year’s 3.65% so the administration could get rid of some people while doubling-down on a losing football program I mean to hold the line on expenses and still flat growth in enrollment, I wonder if the administration will start to take a different tactic.

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Posted in Administrator Life, Budgets, In the media..., Student Life

At least EMU isn’t Rutgers

Posted on August 17, 2011 by | 6 Comments

That’s not a phrase I’d generally use since Rutgers is a great university, but this article published by the Bloomberg news service, “Rutgers Boosting Athletics at Expense of Academics Fails to Emulate Texas,” actually makes me glad that our current Board of Regents isn’t gutting academics as badly here.  Believe it or not.  The opening paragraphs:

Rutgers University forgave $100,000 of the football coach’s interest-free home loan last year. The women’s basketball coach got monthly golf and car allowances. Both collected bonuses without winning a championship.

Meanwhile, the history department took away professors’ desk phones to save money and shrank its doctoral program by 25 percent. After funding cuts by the deficit-strapped Legislature, New Jersey’s state university froze professors’ salaries, cut the use of photocopies for exams and jacked up student tuition, housing and other fees.

Rutgers also increased funding for sports. The 245-year-old school spent more money on athletics than any other public institution in the six biggest football conferences during the 2009-2010 fiscal year, based on data compiled by Bloomberg. More than 40 percent of sports revenue came from student fees and the university’s general fund.

“I am dumbfounded,” said New Jersey Assemblyman David Wolfe, a Republican who is a professor of psychology at Ocean County College in Toms River. “Rutgers officials appear before the Legislature every year and claim they are underfunded and need more money. Now we find out we have the No. 1-subsidized athletics program in the country.”

That last passage there suggests Rutgers’ sports spending might come back to bite them in terms of state funding.  I wonder if the Michigan legislature will notice any of the funding for athletics at the expense of academics at EMU….

Oh, the bit about Texas mentioned in the headline is discussed later in the article.  Texas is one of seven universities (according to this piece, at least) that make enough money from football to pay the bills for athletics and beyond.  Note that:  seven out of what I would guess to be 200 (or so?) BCS universities.

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Posted in Board of Regents, Budgets, In the media..., Sports

Meanwhile, at Wayne State…

Posted on July 29, 2011 by | 3 Comments

A couple of interesting stories in the news about Wayne State (and Michigan State, too) both from the Detroit Free Press:

  • “Wayne State cuts 200 positions in face of $32M less funding.”  The opening sentences say “Wayne State University has eliminated 200 positions, spokesman Matt Lockwood confirmed.  Of those positions, 80 were currently filled. The exact number of layoffs will be known once union bumping processes are complete.”  So what this suggests to me that they are laying off 80 people and not hiring 120.
  • “State: Tuition hikes at Michigan State University, Wayne State University didn’t break rule — technically.” I heard a version of this on the radio this morning:  depending on how you count it, MSU increased tuition by 9.4% and WSU by 8.4%.  And then there’s also the issue of various fees and such that are being implemented all over the place (and that includes at EMU, BTW) that aren’t tuition but certain that impact the cost of attendance.  It’ll be interesting to see how this plays out.

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Posted in Budgets, In the media..., Michigan State U, Wayne State U

A couple of tuition rate stories

Posted on June 30, 2011 by | 11 Comments

First, an alert EMUTalk.org reader sent me this piece from CNN Money, “Extreme Tuition Hikes Ahead.” It might be paraphrased as “you think it’s bad in Michigan, you ought to see these other states.”

Second, from the New York Times comes “What’s the Most Expensive College? The Least? Education Dept. Puts It All Online.” That’s a little misleading too because of the different ways that costs are calculated, but you get the idea.  There are some links to some kind of interesting tools to look at to compare schools, as long as you realize the “ballpark” nature of a lot of the numbers.  There’s the College Affordability and Transparency Center and then this much more interesting tool, the College Navigator.

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Posted in Academics, Budgets, In the media...

Facebook folks: cast your vote in the Echo FB poll

Posted on June 29, 2011 by | 1 Comment

I noticed that the Eastern Echo has rolled out a poll on Facebook about the tuition hike.  Here’s a link to it; I think this should work to click on and then to vote, but I’m not positive.  Anyway, the question and answers are:

How do you feel about EMU’s 3.65 tuition increase?

  • It’s great!  The university kept students in mind when tackling the budget.
  • The university shouldn’t have raised tuition at all.
  • EMU should have raised it more to help balance the budget and save jobs.
  • I don’t care either way because I still have to pay tuition.

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Posted in Administrator Life, Board of Regents, Budgets, EMU President, In the media..., Professional-Technical, Staff Life, Student Life

“EMU saves 5.4 million”

Posted on June 29, 2011 by | 6 Comments

Well, that’s the headline on annarbor.com at least: “Eastern Michigan University will save $5.4 million from layoffs, attrition.” Here’s a quote:

Eastern Michigan University will save $3 million from the layoff of 38 employees and $2.4 million by not filling about 30 vacant positions.

The university laid off 38 employees last week, including 28 unionized workers and 10 from administrative positions as a result of the budget approved by the Board of Regents June 21, said Walter Kraft, vice president of communications.

Like I said before, if the rule of thumb notion that a percentage point raise in tuition raises a million dollars, then this merely confirms that these firings and layoffs– or at many of them– were avoidable.

There is some dispute about the number of people losing their jobs:  Kraft said there was 12 PTs laid off and the number in the union press release was 14.  I am sure someone who knows will chime in on that sooner than later.

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Posted in Administrator Life, Board of Regents, Budgets, EMU President, In the media..., Professional-Technical, Staff Life