Budget & tuition in the news

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Wayne State, faculty union agree to new 3-year contract

Wayne State University in Detroit and a faculty union have reached an agreement on a new three-year contract. Members of the Wayne State Chapter of the American Association of University Professors-American Federation of Teachers (AAUP-AFT Local 6075) will receive a 2% lump sum salary increase in the deal’s first year, the university said Wednesday. “We regard our world-class faculty and academic staff highly, and it’s important as a university that we compensate them fairly in recognition of the groundbreaking work they do,” Wayne State President M. Roy Wilson said. “We also have a responsibility to our students to provide them with the best and most innovative instruction available at an affordable cost, and we feel this agreement succeeds on all counts.” 
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Michigan colleges took financial battering in first months of COVID-19, new documents show

By David Jesse  The first months of the COVID-19 pandemic in 2020 took a sledgehammer to the revenues of Michigan's public and private colleges and universities, causing losses of more than $250 million collectively. The majority of the losses — more than $140 million — came from the school's auxiliary enterprises like dorms, dining and facility rentals. A Free Press review of audited financial numbers in each school's annual financial statement for the 2019-20 school year, which ended at the end of July 2020 for nearly all the schools, shows the extent of the wreckage. Full financials for the 2020-21 school year, when schools spent the entire session in the grip of the pandemic, are not yet complete. When it became clear in the spring of 2020 COVID-19 was unlike other diseases, college officials across the state warned it could have devastating effects on budgets. In early 2020, university administrators across Michigan could see the end of the school year drawing quickly closer. Plans had been made and projects started. It was time to start working on next year's budget. A few folks — including the presidents of the University of Michigan, Wayne State University and Oakland University, all medical doctors by training — were aware of COVID-19, but many people weren't. 
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Dave Massaron takes new job at Wayne State

The head of Gov. Gretchen Whitmer’s budget team is leaving state government to become the chief business officer and chief financial officer/senior vice president for finance and business operations and treasurer at Wayne State University. Although the announcement of his new role and departure comes before the governor and lawmakers have finalized a budget, he will stay with the administration through the end of the fiscal year in September. Before serving as State Budget Director, Massaron served as the city of Detroit’s chief financial officer. 
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Wayne State University raises tuition for undergraduate, graduate students

Wayne State University's Board of Governors unanimously approved a tuition increase of 3.9% for both undergraduate and graduate students on Friday. The new tuition rate will result in a $15 increase per credit hour for lower-division undergraduates, officials said. The university also increased its commitment to financial aid, bringing total institutional support to almost $100 million. WSU board Chair Marilyn Kelly said as the governing body of the university, officials are keenly aware of the financial burdens many students face. "This is a decision not arrived at easily or without reservation," Kelly said in a statement. "We have committed the university to making its programs financially accessible to all, including those of limited means. We have not wavered from that commitment. We have provided financial programs to aid students." Wayne State will finalize its university budget in the fall, officials said. University officials say they remain hopeful the Michigan Legislature will increase appropriations to universities this year but is awaiting passage of the state budget. Wayne State President M. Roy Wilson said WSU is the only Michigan public university that has not had its budget restored to fiscal year 2011 levels after significant cuts were made to higher education that year. “No matter what the financial circumstances are, our priority remains the same,” Wilson said in a statement. “As stewards of the university, we will provide a high-quality education to as many students as possible, while continuing to feed the talent pipeline to ensure Michigan’s workforce and economy are strong in the years ahead.”  
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Editorial: Per-pupil funding puts elite colleges at risk

Don't hate the University of Michigan because so many students from around the world covet a spot on its campus. Nor Wayne State University because it sits in the midst of a city that is red hot with young people and has unique academic offerings. It's not a bad thing for the state to have institutions with such international appeal. And while serving Michigan students should be job one for a state school, moving to a funding formula that only considers residency rates would be bad for Michigan and for the universities. The House passed a budget bill that ties funding to state universities to the percentage of in-state students they enroll. If enacted, it would make Michigan the only state that uses a per-pupil formula to fund higher education. Typically, the Legislature has increased university appropriations across the board, while occasionally applying other benchmarks such as graduation rates or the percentage of students receiving need-based financial assistance. The Senate's budget bill sticks with the 2% universal hike recommended by Gov. Gretchen Whitmer. Under the House formula, most of Michigan's 15 public universities would see an increase in state support, with at least eight in line for their appropriations to grow by 10%. But the House isn't making the total higher education budget pie larger. It's remaining flat. So any increases the other schools receive will come out of the money that UM and WSU expected. UM would get a 12.2% cut, or nearly $40 million of its $283.5 million state subsidy. Wayne State would lose 4%, or $8.2 million of the $195 million it gets from the state. Nearly half of the 46,000 students on UM's Ann Arbor campus are from out of state, and at WSU non-residents make up just under 10% of enrollment. 
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Mich. House pushes plan to slash UM, Wayne State funding

Michigan's 15 public universities are bracing for a potential change that would severely alter how state aid is divided up among them, with most schools expected to see increases at the expense of two of the state's top research institutions. The Michigan House of Representatives this month passed controversial legislation that would tie the annual appropriation for the state's public universities to the number of full-time Michigan students enrolled. The House plan does not include an increase in funding for higher education — unlike the 2% increase passed by the Senate and recommended by Gov. Gretchen Whitmer. Instead, it would keep the appropriation around $1.3 billion but shuffle how much each college gets while phasing the changes in over three years. Under the House plan, UM's Ann Arbor campus stands to lose the most: $39.5 million, or 12% of its state funding, in the first year and nearly $125 million over the first three years. Wayne State would lose $8.2 million, or 4% of its state aid, in the first year and nearly $29 million in three years. Both universities, respectively, educate a larger percentage of non-resident students. Michigan would become the only state in the nation to use resident enrollment as the sole basis for state funding, said Britany Affolter-Caine, executive director of the University Research Corridor, an alliance of UM, WSU and MSU that promotes research as a driver of the state's economy. Wayne State University President M. Roy Wilson said a cut of $28.6 million over three years would dramatically impact tuition and services at the urban research institution where 2,135 of the 24,155 enrolled students are not from Michigan. The proposed funding change is a similar mechanism that is used to fund K-12 education in Michigan, which pays a set amount per student to schools each year, but it costs more to educate graduate and professional students, Wilson said. Some universities can put 300 undergraduate students into one lecture hall whereas a medical school class may not have that many. "There is a difference of scale here," Wilson said. "There needs to be a more sophisticated mechanism that better recognizes the unique missions of the 15 public universities in Michigan." Wilson added there is an underappreciation of research universities' contributions to the state's economy and residents' health and wellbeing. "Michigan has not historically appreciated the value of research," Wilson said. "There is a huge (investment) return on research. ... Research has a multiplier effect. The kind of technologies that come out of research universities: the life-saving discoveries and the improved quality of life is also really important. It's not just the financial benefit."
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Business, education leaders blast House cuts to big universities

Business leaders from across the state and the University Research Corridor (URC) of Wayne State University, Michigan State University and University of Michigan say that the House budget plan for higher education “picks winners and losers.” House Republicans passed House Bill 4400 last week that would better fund universities with more in-state students for Fiscal Year 2022 using a per-resident student formula, leaving two of the state’s larger research universities with budget cuts. U of M-Ann Arbor would see a 12.2% budget cut, $39.5 million less, and Wayne State University would see a 4% budget cut, or $8.2 million less, from the FY ‘21 budget. MSU would see a 1.2% increase. The three universities in the Upper Peninsula will not see any change to their state funding and the other nine universities will see an increase in funding ranging from 1.2% to 10%. The funding will largely be redistributed among universities, as the total House Higher Education budget will not see an increase. During a press conference Monday, business leaders and the URC shared support for the GOP Senate-passed plan, which mirrors Democratic Gov. Gretchen Whitmer’s executive budget recommendation, to increase one-time funding by 2% for all of Michigan’s state universities. “It’s a budget under which all students at all 15 universities benefit and would set up businesses and our state to benefit. Unfortunately, the budget passed by the House is very different. It picks winners and losers and will have a negative effect on students, businesses and Michigan’s economic future,” URC Executive Director Britany Affolter-Caine said. 
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Budget plan would cut funding at UM, WSU, reward colleges with more in-state students

The University of Michigan and Wayne State University would see deep cuts in state aid under a House Republican-authored plan that seeks to tilt taxpayer support of public universities in favor of schools with more in-state undergraduate students. The fiscal year 2022 spending plan passed by the GOP-run House Appropriations Committee would cut UM-Ann Arbor by $39.5 million — a 12.2 percent cut for one of the state's flagship research universities — and slash Wayne State's taxpayer support by $8.2 million, or 4 percent. In return, the House Republican plan would award a 10.1 percent or $5.4 million increase in funding for Oakland University through a formula that would favor universities where the majority of students are Michigan residents. Central Michigan University, Eastern Michigan University, Ferris State University, Grand Valley State University and UM-Dearborn and UM-Flint would all see their state funding rise by 10 percent next school year if the House Republican plan becomes law, according to the House Fiscal Agency analysis. Wayne State President M. Roy Wilson warned Monday the House budget plan would lead to "several painful actions" for the Detroit-based university. "Like many of our higher education counterparts, the pandemic has hit Wayne State hard," Wilson said Monday in a statement. "We are currently operating at a deficit but managing through the use of our rainy-day fund and all-around belt tightening. However, if this iteration of a higher education budget is passed, we would be forced to take several painful actions." Wayne State has fought state funding formulas in the past that penalized the school for having more emphasis on research, as well as a high percentage of graduate students and non-traditional part-time undergraduates who take longer than six years to complete a bachelor's degree. The funding formula calls for additional reductions in 2023 and 2024, though there was no analysis from the House Fiscal Agency of how that would impact the bottom line of UM, Wayne State and others in future years.
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Wayne State freezes tuition, warns of budget cuts

Wayne State University’s Board of Governors unanimously agreed Friday to a proposal by President M. Roy Wilson not to increase tuition for undergraduate and graduate students for 2020-21. “It has been a difficult decision for the Board of Governors to freeze tuition for the coming year,” board chair Marilyn Kelly said in a statement. “Two of our most crushing worries have been, first, that in freezing tuition, the board forces the university to confront a budget shortfall of as much as $60 million. Second, we render the university all the more challenged to meet the goals we’ve set of making Wayne University an even better learning center for minorities and the financially underprivileged to gain a quality education." Wilson said there will be some budget cuts, noting that the university relies on tuition as one of its two main funding sources, with the other being state aid. “There will be some financial pain,” he said. “It’s too early to say specifically what the budget deficit will be. There are still too many unknown variables. We don’t know how long the pandemic will last or its impact on enrollment and our state appropriation."
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Program offers $75,000 loan repayment to Michigan medical graduates

Four Michigan universities have teamed up to develop a program offering upcoming medical graduates a $75,000 loan repayment to work in rural and urban underserved communities. Michigan Doctors, or MIDOC,  is a partnership between Wayne State University, Western Michigan University, Michigan State University and Central Michigan University. The program has developed select residency openings for graduating medical students. "There is fierce competition nationwide for a limited number of residency slots each year," said Jack D. Sobel, M.D., dean of the Wayne State University School of Medicine, in a statement. "We must find innovative ways to increase the number of resident training positions if we are to successfully meet the state and nation's growing needs for more physicians."
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Wayne State to eliminate out-of-state tuition costs for some students

Wayne State University will offer in-state tuition costs to select nonresident students beginning next fall, saving those students about $60,000 over four years, the university announced Tuesday. The new four-year Discover Detroit Scholarship plan eliminates nonresident charges for qualified undergrads, who will also have access to other merit and need-based awards, the Detroit-based university said in a news release. Only U.S. citizens and legal residents can receive the scholarship.