Economic crunch means public schools are accepting more OOS students

Parents Forum
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<p>I think you’re stretching these figures just a bit. We’re full-pay. If my D were to enroll at Michigan as an OOS student, her tuition & fees plus room & board would come to $43,861. That’s a good bit less than the comparable costs at her top choice LAC which come to $51,165—about 15% less at Michigan, a rather handsome discount. I just wish I could interest her in Michigan which is absolutely stellar in every field she’s expressed an interest in.</p>

<p>Now it’s true, Wisconsin-Madison OOS is even cheaper, at $31,103 for tuition & fees plus room & board. But the cost difference between Wisconsin and Michigan is closer to $12,000 than $20,000.</p>

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<p>^^unless of course she entered UMich with AP credits…apparently they bump you up to upperclassman tuition at some point of credits which, in fact, makes COA closer to $47,000 according to a couple of friends.</p>

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<p>And I think YOU need to check with verifiable sources. Perhaps you can start with “How Much Does it Cost to Attend U-M”? I highly recommend it. But if you can’t find it on google, I’ll help:</p>

<p>OOS Lower Division = $46,999
OOS Upper Division = $49,451</p>

<p>And, I’m guessing that those numbers don’t include extra for air travel for long-distance OOS’ers. But regardless, $49,451 is mighty close to “~$50k/year”, even for “government work”.</p>

<p>[University</a> of Michigan Office of Financial Aid: Cost of Attendance](<a href=“http://www.finaid.umich.edu/Financial_Aid_Basics/cost.asp]University”>http://www.finaid.umich.edu/Financial_Aid_Basics/cost.asp)</p>

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<p>^ bluebayou,
You’re comparing apples & oranges. The COA figures you’re citing for Michigan include the estimated cost of books, travel, and personal expenses. The comparable figure for Wisconsin would be $35,033—again, about $12K less than Michigan “lower division” (freshmen & sophomore), about $14K less for “upper division” (junior & senior). Still well short of the $20K difference you’re claiming.</p>

<p>[Costs</a> and Aid - Office of Admissions at the University of Wisconsin-Madison](<a href=“http://www.admissions.wisc.edu/costs.php]Costs”>http://www.admissions.wisc.edu/costs.php)</p>

<p>The figures for my D’s favorite LACs don’t even mention books, travel, and personal expenses—it’s $51,165 just for tuition & mandatory fees plus room & board. There’s no reason to suppose books, travel, and personal expenses would be any lower at a Northeastern LAC than at Michigan; indeed, for us, the travel cost to Michigan would be much lower. But if we’re generous and hypothesize a similar amount for these categories as at Michigan or Wisconsin, the LAC still comes out about $7-8K more a year than Michigan. For a full-pay family that’s really going to have to stretch every dollar to make it through, that $7-8K a year can make a significant difference. IMO, Michigan OOS is still a good value, though exactly how good may depend on the particular field you’re in. In a field like philosophy or classics, I’m absolutely certain that my D could get as good or better an education at Michigan than at her favorite LAC, at a significantly lower cost.</p>

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<p>Reproduced from the report cited above by Dean J:</p>

<p>“State general funds are tax revenues appropriated by the State Legislature for the use of the institution. The state general fund appropriation is made up of an appropriation for educational and general programs, a special appropriation for specific programs, and an appropriation for student financial aid. The following shows peer institutions using the 2008-09 state appropriation for each school.” </p>

<p>General Funding per In-State Student, State University</p>

<p>$27,843 U North Carolina (82% IS)
$19,031 UCLA (94% IS)
$18,117 U Maryland (76% IS)
$16,819 UC Berkeley (93% IS)
$16,469 U Michigan (65% IS)
$10,562 U Virginia (72% IS)</p>

<p>I think that U Maryland is included as a peer due to its physical location next door to Virginia.</p>

<p>Most states have pretty massive fiscal problems right now and arguably California and Michigan are in the worst fiscal shape of almost any state in the USA. I think it’s pretty clear that these per student numbers are likely to go down even more and possibly by a lot at some of these schools. </p>

<p>Not completely sure how to interpret these numbers, but I think that they could be a good proxy for judging the degree of dependence that each school has on its state government. U Virginia appears pretty far along in this weaning process. U North Carolina has a long way to drop, but its tuition cost is also the lowest (by far) of these and thus they can raise tuition without becoming financially uncompetitive. Time will tell how much the fiscal mess in California and the economic mess in Michigan will affect these colleges. I look for U Maryland to continue to improve its relative position as it benefits from proximity to the big spenders in DC and the strength of some growing industries, eg, health/healthcare-related and technology. </p>

<p>IS Tuition & Fees , State University</p>

<p>$ 5,396 , U N CAROLINA
$ 8,053 , U MARYLAND
$ 8,228 , UCLA
$ 8,352 , UC BERKELEY
$ 9,870 , U VIRGINIA
$ 11,738 , U MICHIGAN</p>

<p>bc,
Why does U Michigan have a different tuition & fees cost for freshmen and sophomore than it does for juniors and seniors?</p>

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<p>I have no problem with allowing OOS students to attend PSU and pay more, but I would highly favor limiting the percentage them, like NC does. It SHOULD be harder for non-residents to attend. The problem with the satellite campuses is that most of them have more of a community college reputation with a PSU price tag. It seems crazy to think that my son may have a better chance at acceptance an OOS public like UVM or WVU then Penn State.</p>

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<p><<it seems=“” crazy=“” to=“” think=“” that=“” my=“” son=“” may=“” have=“” a=“” better=“” chance=“” at=“” acceptance=“” an=“” oos=“” public=“” like=“” uvm=“” or=“” wvu=“” then=“” penn=“” state.=“”>></it></p>

<p>That’s exactly what we’re facing with UT-Austin and one of the reasons so many well-qualified students choose to go OOS.</p>

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<p>Grcxx3, there’s a school of thought that the admissions policies at UT are one reason SEC schools like Alabama are getting better and better students. Texas is producing way more strong HS seniors than UT can accommodate, and TAMU just isn’t right for everyone.</p>

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<p>^^^
I completely agree Hanna. The surrounding states (including the SEC states) are getting some great kids from here. And TX A&M is one of those “love it” or “hate it” places! And my son is in the “hate it” category!</p>

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<p>I expect the same situation will be visited upon CA very soon. Even as S was putting final touches on his app to UCs, we were having a discussion with him about the deleterious effects the budget situation is already having on the UCs, and why it’s important for him to concentrate on the apps to various prviate schools. It’s a shame, but our conversations with UC profs in various departments at various schools are bearing this out. Next year will be tough at the UCs, since the adjuncts that really couldn’t be let go on such short notice this year will likely be gone in 2010.</p>

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<p>I don’t know. If memory serves, they didn’t make this distinction back in my day. I can only speculate . . . but why not? </p>

<p>First, I’d note that tuition rates at Michigan also vary by school or college, so business and engineering are slightly more costly than LS&A (liberal arts). I have seen a partial explanation for this: some of the individual schools’ websites state that undergrad tuition reflects several factors including the size of the school and its student/faculty ratio. I could see a similar rationale underlying the price distinction between “lower division” and “upper division” students. On average it’s going to be more costly to educate upperclassmen because more of their classes are going to smaller, specialized classes, hence a lower student/faculty ratio—and the need to maintain more faculty across a broader range of specialties within a given field. Most of the big lecture classes (at Michigan typically taught by full-time faculty but often with TAs leading separate small discussion sections) are going to be at the intro, i.e., “lower division,” level. These aren’t absolutes, of course; a few upper-level courses are big, and some intro courses are small, but on average it’s cheaper on a cost-per-unit basis to educate freshmen and sophomores than juniors and seniors. In fact, my guess would be that the relatively small difference between upper division and lower division tuition doesn’t fully capture the actual cost difference to the university.</p>

<p>A more cynical explanation would be that it’s based on demand elasticities. In recruiting first-year students, you’re competing against every school in the country for OOS students, and against every school in the state for in-state students. Too high a price and you lose market share, which in this case means losing market share among the high-end students you’re trying to recruit. But once they’re in, most will stay. Upper-level students may grumble about their tuition, but at a school like Michigan relatively few will transfer or drop out because of tuition. So demand is less price-sensitive at the upper level. And most entering freshmen and their families will be more concerned about freshman tuition and fees than upper-level tuition and fees. Like it or not, I suspect there’s more than a little of this kind of thinking. Michigan is a pretty savvy, professionally run organization. They’ve got plenty of people around there who are perfectly capable of making these kinds of demand-elasticity calculations. That’s also, by the way, why there’s an upper limit to how high they can raise OOS tuition, probably about where it is now, just a few thousand dollars a year cheaper than top privates. As for in-state tuition: well, it’s still a bargain, and while they may lose a few top candidates to Michigan State on the basis of tuition, there’s probably still more room for in-state tuition to increase as the state’s contribution declines. </p>

<p>Lest you think playing these demand elasticities is too cynical an approach for a university to take, just compare the FA figures for “first-year, full-time students” with the FA figures for all full-time undergraduates at some other schools. NYU, for example, meets on average only 72% of need for first-year, full-time undergrads; but for all undergrads that figure drops to 66%—and since the all-undergrad average includes freshmen, the percentage of need met for upper-level undergrads must be somewhere in the range of 63% or 64%, i,e., 8 or 9 points below the level for freshmen. In effect, then, NYU is discounting tuition more heavily for freshmen with more generous FA to get them in the door, then raising the net cost once they’re in—a devious backdoor way of doing what Michigan is doing more transparently with differential tuition rates. By the way, like NYU, Michigan isn’t able to meet 100% of need, though it comes much closer at 90% of need met for both freshmen and “all undergrads” alike, leveling the playing field on the FA end.</p>

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<p>This is rather misleading. I don’t mean to underestimate Michigan’s fiscal and economic woes; they’re severe. But as state budgets go, there are quite a few states in far worse shape. Here’s an estimate by the highly respected and non-partisan Pew Center on the States listing the states with the most sever budget problems, ranked by the size of the budget deficit expressed as a percentage of the total state budget (as of July 2009):</p>

<ol>
<li>California 49.3%</li>
<li>Illinois 47.3%</li>
<li>Arizona 41.1%</li>
<li>Nevada 37.8%</li>
<li>New Jersey 29.9%</li>
<li>Wisconsin 23.2%</li>
<li>Florida 22.8%</li>
<li>Rhose Island 19.2%</li>
<li>Oregon 14.5%</li>
<li>Michigan 12.0%</li>
</ol>

<p>Yes, Michigan makes the “10 worst” but its budget hole is roughly half the magnitude of Florida’s or Wisconsin’s and less than a quarter the size of California’s, relative to the size of each state’s budget. (In absolute terms, of course, California’s deficit is well over an order of magnitude larger than Michigan’s). And another half dozen states. including biggies like New York, Georgia, and Colorado, just barely missed the 10 worst list, with budget deficits approximating Michigan’s. So with all the auto industry woes, why isn’t Michigan’s budget situation worse? First, of course, autos are not the state’s only industry. Second, autos haven’t disappeared. Ford is actually doing quite well, and GM is showing some signs of at least a modest comeback. But most importantly, Michigan never really recovered fom the 2001 recession, so it’s already had to make many of the painful cuts that other states are just getting to now.</p>

<p>That doesn’t bode well for state aid to higher education, of course. But further cuts in that area are likely in many states, not just Michigan and California. I think universities in states providing the highest levels of aid to higher ed are probably the most vulnerable. That would include North Carolina, for example, where it’s hard to believe a $28K per student state subsidy is sustainable.</p>

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<p>I think, as an aside, that we should note that Econ 101 instructs us that when price controls are “imposed”, we can expect a shortage of the product.</p>

<p>In this case, it is slots for in-state-students at the state university.</p>

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<p>Article with some interesting facts on actual cost of Uva education and how OOS support the gap.</p>

<p>[Tuition</a> increase looks likely at UVa. | Lynchburg News Advance](<a href=“http://www2.newsadvance.com/lna/news/state_regional/article/tuition/21487/]Tuition”>http://www2.newsadvance.com/lna/news/state_regional/article/tuition/21487/)</p>

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<p>It’s also worth noting that Michigan meets 90% of need on average, but promises to meet 100% of in-state need; I don’t have the IS/OOS percentages in front of me, but someone more stats-savvy could probably approximately the average % of OOS need met.</p>

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<p>I’ll post the same response I made to Barron’s duplicate post on the UVa forum:</p>

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<p>I have sent an email to get the cost of instruction figure and, of course, will report it when I get it. Needless to say, $14k doesn’t cover it.</p>

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<p>Bc,
I’m not misleading anyone. You might want to take a closer look at that Pew Survey. Michigan might rank 10th on the data point you cited, but the survey was actually done for a larger set of data points. On an overall basis, Michigan ranked 4th. Here is an article that provides more detail:</p>

<p>[Michigan</a> will be among the poorest states for years, study says | freep.com | Detroit Free Press](<a href=“http://www.freep.com/article/20091112/NEWS06/911120445/?imw=Y]Michigan”>http://www.freep.com/article/20091112/NEWS06/911120445/?imw=Y)</p>

<p>Here is a key quote from the article that bodes ill for the publics in these states (and the same thought undoubtedly extends beyond only 10 states):</p>

<p>“The Pew report says the 10 states’ financial woes could result in higher taxes, layoffs, longer waits for public services, crowded classrooms, higher college tuition and less support for unemployed and poor people.”</p>

<p>Here’s the overall comparison of the 10 states cited by the Pew Survey as being in the greatest fiscal peril:</p>

<p>Score (30 is highest possible), % Chg in Rev 08-09, Budget Gap Size for F10, State</p>

<p>30, -16.2%, 49.3%, California
28, -16.5%. 41.1%, Arizona
28, -12.5%, 19.2%, Rhode Island
27, -16.5%, 12.0%, Michigan
26, -19.0%, 14.5%, Oregon
26, +1.5%, 37.8%, Nevada
25, -11.5%, 22.8%, Florida
23, -15.8%, 29.9%, New Jersey
22, -10.9%, 47.3%, Illinois
22, -11.2%, 23.2%, Wisconsin</p>

<p>Michigan is hardly alone in its budget problems and fiscal challenges, but the economic fundamentals may be much longer in recovering than in states like California, Arizona, and a few others that are mentioned. </p>

<p>Re the tuition & fees approach of U Michigan where they hike the price for juniors and seniors, I guess you could call it being “savvy.” I (and probably others) might characterize it differently, but I won’t go there for now. BTW, do you know of other major colleges that do this? </p>

<p>Kei,
We figured out in another thread that U Michigan’s financial aid meets the needs of its students as follows:</p>

<p>100% IS students
62% OOS students</p>

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<p>Dean J is correct, the article wording was a bit misleading but re-rereading I agree that you can’t add the two and get the total expenses.
But the claim that the state now only funds 5% of the UVa budget is also very misleading as I have shown before.</p>

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<p>This is an excellent point; thanks for the reminder.</p>

<p>Or, another way of putting it might be: Be careful what you wish for.</p>