Feb.28

Higher education’s role as an economic mobilizer threatened by defunding

Michigan Future Inc. has long argued that the state’s economic policy should be organized around the goal of raising household incomes for all Michiganders. We have also long championed boosting the number of four-year degree holders in our state as the most effective policy lever to accomplish this goal.

There is ample evidence that there is no greater engine of economic mobility than a four-year degree. Sadly, however, 217 of the 381 public institutions that were studied for the Equality of Opportunity Project’s Mobility Score Card, admitted 4.6 percent fewer students from the lower 40 percent of income rankings between 1999 and 2013. That should come as no surprise given the growing financial burden for tuition that states are placing on students and their families. In Michigan, state disinvestment has led to two-thirds of tuition costs being covered by students and less than a third of tuition costs being covered by state funding, the exact opposite of the funding formula that was the norm until the early 1990s, back when state leaders recognized and funded higher education as a public good.

Between 2008 and 2016, per student funding in higher education declined 18 percent nationally, according to the Center on Budget and Policy Priorities . The decline is even more stark in Michigan, where per-student funding declined 21 percent.

It matters because people who have degrees have lower unemployment rates and higher salaries than those with a high school diploma or less. According to the U.S. Department of Education’s National Center for Education Statistics, students who graduated in Great Recession-plagued 2008 were earning an average of $52,000 four years later. Six years after graduation, their unemployment rate was 3.4 percent, a fraction of the 10 percent unemployment rate for workers with a high school diploma or less in 2014.

While some have questioned the value proposition of paying for a college degree, it’s telling that wealthy Americans overwhelmingly send their kids to college. In fact, while the number of students admitted from the bottom 40 percent has lagged, nearly two-thirds of the schools that were studied in the Mobility Score Card admitted 5.4 percent more students from the top 20 percent in family income.

As a board member at Wayne State University, a school that prides itself on accessibility, I understand the difficult choices that university leaders are forced to make when building a student body. State disinvestment has forced schools to vigorously compete for students whose families can afford to pay full tuition costs and sometimes in that competition, the need to recruit and retain low income students can be lost.

But if we want a nation where the American Dream is something more than a hollow slogan, we need to make access to higher education real for the low-income students who need it most.

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Kim Trent

Kim Trent is a policy associate for Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future's mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. She also serves on the Wayne State University Board of Governors and is especially interested in education policy and race, class and gender issues.

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