University officials around the state and region are searching for ways to fill the growing gaps in their budgets — and some say turning to students and donors is one of the few options left.
On Wednesday, MSU President Lou Anna K. Simon met in Chicago with members of the regional Committee on Institutional Cooperation. The group discussed ways to improve collaboration between the schools to maintain the quality of their programs in the face of diminishing state support.
"It's going to be very difficult in this climate to expect significant increases in funding," Simon said.
With a variety of strains being placed on state and federal budgets, it's getting harder to find money to put into education, said Henry Levin, a professor of economics and education at Columbia University.
"We have a lot of things competing with higher education at the present time," said Levin, who is also director of the National Center for the Study of Privatization in Education. "I think most analysts would say in the long run, higher education is going to need to rely more and more on private resources."
The most significant source of private money for universities is right out of students' pockets.
"When you think of privatization, start with tuition," Levin said. "The thinking is that students whose families can pay should be paying a larger share."
In turn, universities can give a chunk of that money back to the neediest students in financial aid.
At MSU, financial aid has increased 19 percent this year, corresponding to a 13.5 percent tuition increase approved by the MSU Board of Trustees in August.
Government aid has not kept pace with tuition increases, said Val Meyers, associate director of the Office of Financial Aid.
Last year, 25,741 students received need-based aid.
But state and federal aid, which makes up more than 70 percent of aid the university gives, is mostly in the form of loans.
To receive federal grants, students have to be "pretty needy," Meyers said.
Simon said she sees alternatives to tuition increases for taking pressure off university budgets, such as cutting costs by partnering with other schools in more programs, and growing private donations.
"We have to raise more endowment," Simon said. "That has to be a priority."
She stressed that keeping research institutions competitive is crucial to the health of the regional economy, and former University of Michigan Provost Paul Courant agreed.
"A strong university system is essential to this state's future. If that includes raising taxes, so be it," said Courant, who also attended Wednesday's conference.
Michigan Rep. John Stewart, R-Plymouth, said he couldn't recommend tax hikes as a solution, but he doesn't see many options.
"There's no political will to do it," said Stewart, who is the chairman of the House Appropriations Subcommittee on Higher Education. "This is the biggest example of hyperbole, where funding does not follow our words."
But lack of state support and rising tuition costs are nothing new to Michigan universities, Courant said.
"We've been, in that sense, less and less public for the last 50 years," Courant said. "We are, at our core, public institutions. We would hate to lose that identity entirely."
