In 1994, MSU administrators revolutionized the way the university raises tuition each year.
That was the year MSU President M. Peter McPherson pledged to students he would keep hikes at or below the projected rate of inflation.
Sound appealing?
For the past seven years, MSU tuition hikes have averaged 2.8 percent a year. Compare that to Michigan’s other four-year universities, which raised rates 4.6 percent in the same time frame.
Big Ten counterparts have increased even more.
And as long as the guarantee continues, students can expect to see only moderate tuition rates.
And students like that.
“Anything that can keep tuition at a reasonable level I think is good for all people involved,” says Matt Tamborini, a general management senior.
The guarantee is modified each year for the incoming freshmen, so the rate freshmen pay their first year applies for the next three years. If a student stays longer than four years, the guarantee is void.
Basically, the initiative - which is very unique, and has received much publicity since it was unveiled several years ago - was to allow students to know what they’ll be paying and allow the university to know how much money it will have, McPherson said.
Simple enough.
The problem? It’s grown more complicated.
The guarantee, in part, has now become reliant on more support from the state Legislature, which in recent years has failed to tighten the funding gap between MSU and fellow research institutions the University of Michigan and Wayne State University.
Beginning last fall, MSU altered the guarantee to make it contingent on whether state lawmakers show continued progress in tightening the gap.
So far, little has been done. MSU still receives about $2,000 per student less than Wayne State and U-M, and Gov. John Engler’srecent budgets have shown little progress in eliminating any gap.
“The governor’s budget comes up with a modest across-the-board increase - it doesn’t try to alleviate the gap that exists,” said stateRep. Gretchen Whitmer, an East Lansing Democrat whose district includes the university.
An initiative that keeps tuition at a fixed rate is very unique, said Glenn Stevens, executive director of the President’s Council, State Universities of Michigan.
“I can’t cite another institution that has sort of a structured approach like Michigan State has,” he said.
But Stevens said to keep tuition hikes moderate, the Legislature has to lend a helping hand.
“At the heart is quality - (universities) sustain and improve that quality by having a strong fiscal support base in place,” Stevens said.
And if the state doesn’t show signs of offering more equal funding to the state’s three main research institutions, the tuition guarantee could be doomed.
That’s not an appealing choice, MSU officials say.
“The guarantee is based on appropriations from the state to be certain levels,” TrusteeDonald Nugent said. “If they fall below it, we may have to drop the guarantee or change it significantly.”
Thus the guarantee, though admired by students, is a proposal even McPherson - a former executive for a San Francisco-based bank and the program’s chief inventor - has second-guessed from time to time.
Do students benefit?
From one perspective, it’s easy to assume students are beneficiaries of the initiative.
They don’t deal with tuition hikes. They can know exactly how much cash will be in their bank accounts.
“The tuition guarantee is absolutely great for students, there’s no question about it,” said Henry Silverman, a history professor who is spending this semester serving as a research consultant for a new Bill of Rights course being developed.
The guarantee, quite possibly, allows more students to attend MSU - students who might not have otherwise had such an opportunity.
Applications for admission have steadily risen during the past several years, with a record 22,709 freshman applications received for Fall 2000.
Subsequently, academic standards have risen.
“The tuition guarantee is one of those positive factors that has led to a record number of applications over the last several years,” said Gordon Stanley, director of admissions.
But the faculty, many say, are the victims of McPherson’s unique guarantee.
The tuition guarantee doesn’t provide adequate money for program support or faculty salaries, Silverman says. Some statistics might back him up.
MSU ranks last in the Big Ten in regards to faculty salary. The average faculty member at MSU earns $68,629 annually - nearly $13,000 less the average salary at U-M and nearly $23,000 less than faculty at Northwestern, who make an average of $91,580.
To say MSU is way below par in the Big Ten would be unfair though, as the six lowest-paying universities in the conference are separated by only $3,000.
“The bottom six are about the same,” McPherson said. “When you include our health care, which is a richer program than most universities’, then we’re about in the middle.”
And McPherson, along with the eight-member Board of Trustees, has said for several years that improving faculty salaries is a key priority.
Trustee Nugent even said it may be the need to boost faculty pay that will ultimately lead to the demise of the tuition guarantee.
Currently, he said, it’s the board’s goal to give faculty a one percent higher increase than the average Big Ten pay boost - excluding Northwestern, which is a private school that MSU sees no need to be competitive with.
But Silverman said, despite the talk, administrators have failed to give faculty a substantial pay increase.
“There doesn’t seem to be any remedy in spite of the administration’s claims that they want to increase salaries,” said Silverman, a professor for more than 30 years who himself campaigned unsuccessfully for a seat on the Board of Trustees last year.
He said the guarantee’s major flaw was hindering it upon the rate of inflation, which during the past several years has been quite low - with the economy reaching new prosperous heights.
“That has had an impact on faculty salaries and programs,” said Silverman, who suggested MSU could regulate tuition via alternative methods to bring in the money to adequately compensate faculty.
He suggested setting different rates for different groups of students arriving at MSU in different years.
In some ways, that plan exists, but only for transfer students - who aren’t covered under the guarantee.
Silverman admits he doesn’t “have the perfect solution,” but says something needs to be done.
Agricultural economics Professor Colletta Moser, president of the MSU chapter of the American Association of University Professors, agreed, saying the guarantee definitely hurts faculty.
“Right now we might see a real problem with a tight budget situation at the state level,” she said. “That means that faculty can’t get additional salary funds from tuition because the tuition is capped.
“That puts the university in a difficult competitive situation relative to other universities’ faculty.”
Do students suffer?
Moser argues that students, while having a cap on tuition, don’t always benefit from the guarantee.
“Maybe the students will save $30, $40 a year,” she said. “But if you can’t get the classes you want and you can’t get the people who are experts in their fields then what good is that?
“It’s a very short-term savings. That kind of savings is not cost effective.”
Even the university’s undergraduate student government has taken steps to alter the guarantee - with ASMSU representatives suggesting that a student’s ability to learn suffers if tuition is capped.
Last winter, ASMSU proposed adding a $100 fee to students’ tuition bills, with $50 being paid during the fall semester and $50 being paid during the spring.
The money collected would have been distributed among career service, undergraduate research, libraries and technologies and a program that would have provided faculty with two-year endowments.
While the proposal wasn’t passed, it opened the eyes of several trustees who found it intriguing.
Most recently, ASMSU’s Academic Assembly passed a bill urging the Board of Trustees to change the cap of tuition guarantee to the projected rate of inflation plus two percent. The student government also suggests raising the financial funding by at least as much as tuition each year, while calling on administrators to remove language from the guarantee that states it will only exist as long as the state Legislature works to close the funding gap.
“The idea of a formal tuition restrain policy is a great concept and it’s very important for students,” said Jeff Ziarko, director of university, governmental and budgetary affairs for Academic Assembly. “But we also want it to be a responsible policy that allows for investment in education at MSU.”
ASMSU has also begun lobbying the state for more funding for MSU. Meanwhile, McPherson also seems to be making annual appearances before the state House Appropriations subcommittee on higher education pleading for more funds. He said the university needs help in order to accommodate its three highest costs - health care, faculty salaries and energy.
“Some of our costs are just getting extremely difficult,” McPherson said.
About a third of the university’s funding comes from state funds, about a third from tuition and about a third from federal grants and other moneys.
Increased state funding would potentially allow the tuition guarantee to continue, but without signs that the Legislature wishes to close the gap, it’ll be tough.
“If one leg of that stool comes up way short we’re going to have to make it up someplace else,” Nugent said. “We cannot do that and still hold tuition down as we want to if we don’t get adequate appropriations.”
And while Whitmer, an MSU alumna who was elected to the state House last year, said she sees the benefits of the tuition guarantee, it may be time to reevaluate the process.
“It’s a tough choice to make because Michigan State gives so many students an opportunity for a great education, many of who couldn’t take advantage of that opportunity if not for the tuition guarantee,” Whitmer said. “(But) if we don’t have great professors we won’t continue to be a great school.”
A member of the state House Appropriations subcommittee on higher education, she says it appears as if Gov. John Engler’s budget proposal won’t alter the gap.
Yet for now, the guarantee remains intact.
And it will as long as administrators see fit.
“It’s important to the taxpayers of Michigan and the students that we try to keep education affordable,” Nugent said, saying MSU is “a land-grant institution in the state and we need to do everything we can to keep education affordable to our students.”
That’s good news for students such as Meg Negilski.
The dietetics sophomore said she thinks the tuition guarantee is a crucial policy for students.
“I think it’s important for parents to feel comfortable sending their children to the school of their choice and it not be detrimental to their money situation,” Negilski said.
Kristyne E. Demske can be reached at demskek7@msu.edu.
