The university is arguing that a one-time student rebate shouldn’t be included in the accounting of tuition rates. Last fall and spring, because of federal stimulus funds, students received a 2.4 percent tuition rebate. The state counted that rebate in the cost of tuition for last year, while the university did not.

The state government is arguing that, when the rebate is included in the cost of tuition, the university increased tuition rates past the 7.1 percent state ceiling. This gives the state reason to pull as much as $18.3 million in state funding from the university.

So who’s right? Unfortunately, both sides.

Because the rebate was one-time-only, MSU shouldn’t have to take that into account when trying to get their revenues in order for the next year. It’s not MSU’s fault there isn’t another federal stimulus grant in the pipeline. And the state also has a point: Without that federal rebate, students will be paying more than 7.1 percent more in tuition costs than last year.

Given the technical correctness of each side, who needs to throw in the towel?

The university does — for two reasons.

First, MSU has an obligation to its students to protect them, as best it can, from feeling the pinch of less state funding. That is to say, unless the funds generated by raising tuition 9.4 percent can offset the loss of $18.3 million, MSU needs to switch to the formula the state is using. Calculating the tuition rate changes in compliance with the Higher Education Institutional Data Inventory, or HEIDI, database is worth the state funding the university would receive as a result.

Second, the state has shown no inclination to preserve higher education funding in the past. To the state, not spending $18.3 million is a win, even if that means students have to make up the balance. If legislators deem it necessary to take money from students to address other concerns, they will.

By agreeing to what the legislators want, the university sends the message that it is willing to work for the benefit of the student population while simultaneously receiving the funding promised by the state. Students will be grateful to pay less than expected in tuition (even if tuition still increases and MSU cuts some services), and the state will have the tuition rate it feels is appropriate. MSU will see less of an increase in tuition revenue, but will still receive state funding.

This appears to be a case of choosing the lesser evil. Legislators, for all their posturing about the effects of higher tuition on students, will withhold funding if they can. They will do this despite the likelihood that withholding funds would force MSU to raise tuition and cut programs as well as services to make up the difference.

It’s not about who is right in this case; it’s about who can hurt the other the most. And if the state denies MSU the $18.3 million in funding, it’s going to be students who will take the brunt of
the blow.