Remarks at House Higher Education Appropriations Subcommittee
February 26, 2013
Thank you for the opportunity to tell you about the University of Michigan, and our commitment to a vibrant, productive future for our state and beyond.
I know that with the exception of Chairman Pscholka, all of you are new to this committee and higher education funding. Your work is tremendously important, not only to our public universities but also to the future of our state.
Leading the University of Michigan is a tremendous honor. This is my 11th year and I am as excited as I was the day I began, because the University of Michigan is one of the great assets of our state – as well as our nation and world.
Later this week, there’s a little basketball game scheduled in Ann Arbor between U-M and Michigan State. Both teams have successful head coaches and talented players. Both teams are ranked in the top 10.
I can’t predict the score, but I am certain the game will be competitive, the noise will be deafening, and the level of play outstanding.
We have great public universities in our state. People are passionate about them. And our excellence goes far beyond basketball and football.
As president, my job is to look ahead – far ahead. Ten, 20 and 30 years ahead. Working with our Board of Regents, I want U-M to be more vital than ever for developing cures and therapies, generating economic development, and creating new technologies.
Most important, I want Michigan to continue its legacy of educating young people who will be the leaders of their generation.
U-M is all of four years away from its bicentennial. When you think about 200 years of teaching, research and service, of hundreds of thousands of graduates, it gives you pause. There was a University of Michigan before there was a State of Michigan.
Approaching this landmark celebration, our foundation is strong. Ninety-five of our academic programs are in the top 10 of the nation’s best. Only three other universities – Harvard, Stanford and UC-Berkeley – can make that claim, which has us in very good company.
Our health system – with its hospitals, clinics and satellite offices throughout the state – is consistently one of the finest in the country, including our children’s hospital, ranked No. 8 in the United States. U-M health professionals treat patients from every county in Michigan.
We have extraordinary faculty who commit themselves to teaching first-year students in small seminars. To hands-on learning experiences in Detroit neighborhoods, northern Michigan forest, and emerging industries on the west side of the state. And to research that explains the unknown, preserves the past, and improves our health and welfare.
Just last week we announced the recruitment of a top scientist and his research team from Harvard’s Stem Cell Institute, who came to study heart cells and work alongside our other cardiovascular experts in our North Campus Research Complex – the once-vacant R&D space owned by Pfizer.
I know folks get excited about high school athletes and signing day, but these are the kinds of recruits that really make me cheer.
And U-M students – your neighbors, constituents and family members – are incredible. They continually amaze me with their ideas, their enthusiasm, and their dedication to improving the world around them.
And I do mean the world.
Michigan students receive more Fulbright Awards than at any other university. Fulbrights are highly competitive and allow students to study throughout the world. And for the sixth time in the past eight years, our students have led the nation in winning these awards.
We want Michigan students to have as many of these engaging opportunities as possible.
Today’s world is chaotic, competitive and more challenging than ever, and it is our job to prepare graduates to make a difference for the better.
Our state needs their talent.
Governor Snyder has made it clear: Michigan has 50,000-80,000 jobs going unfilled because residents don’t have the necessary skills in areas such as computer programming, electrical engineering and health care fields.
The high-growth jobs of the future – the industries that will push our state forward – will require higher education degrees or specialized training. And a university is specifically designed to challenge young people, build their skills, and develop critical thinking so they can address the challenges and problems of the day.
That is why we are working harder than ever to keep higher education affordable.
I do not want to lose a single talented high school senior – someone who one day may unlock the mysteries of Alzheimer’s or develop the next-best computer technology – I don’t want our best and brightest to forgo the University of Michigan because of perceived costs.
Because we are affordable, particularly for Michigan residents.
The University of Michigan is the only public university in our state – and one of just a handful in the nation – to maintain a longstanding commitment to cover 100 percent of demonstrated need of resident students through financial aid.
One hundred percent.
Michigan resident students automatically receive a 67-percent discount on tuition compared with what out-of-state students pay. Overall, some 70 percent of undergraduates who are Michigan residents, as well as half of out-of-state students, receive some form of financial aid. And we’ve replaced loans with grants for many of these students, reducing their debt burden upon graduation.
Today, for many Michigan students, it costs less to attend U-M than it did four years ago. I wish I could share that fact with every parent and guidance counselor in our state.
A Department of Education report on college affordability shows that U-M had one of the nation’s slowest rates of growth in costs among the nation’s four-year public universities. Out of 650 institutions, U-M was ranked No. 568. This is one time I was thrilled not to be in the top 10.
We have continually made this commitment to be affordable and support Michigan students and their families at the same time we have reduced our spending and enhanced revenues.
In the past decade, throughout the university, we have trimmed $235 million in recurring costs from the general fund budget. And we are on track to save another $120 million by 2017. That’s $345 million over 15 years.
Let me give you one example: our health care benefits. We’ve restructured them, shifted some of the burden to our employees, and at the same time expanded our workplace wellness programs and incentives. The result is we’ve reduced our General Fund benefits costs by $24 million annually, and achieved even greater benefits savings across all of our sources of funding.
Only one budget item is sacrosanct and that is financial aid; here we are adding dollars. This year alone, we invested $137 million for financial aid.
We are very, very deliberate when targeting savings on campus – the kind of precision you might experience in an advanced course in nanoengineering or microsurgery.
Our priority is to always protect the academic enterprise and the quality of a Michigan education.
Earlier I mentioned our strong foundation, U-M’s bicentennial, and my obligation as president to focus on the future. That is front of mind when we look at how and where to reduce costs.
Where we are putting our resources is in recruiting the best faculty. Going back, again, to sports – the race for the best quarterback or point guard is nothing compared with recruiting top scientists and scholars. We want the best and we compete with the best. Great faculty attract great students, so we work very hard to recruit and retain top talent.
And we’re investing in new academic initiatives for students, such as informatics, entrepreneurship, and stronger ties between engineering and medicine, because biomedical engineering is increasingly important.
I’ve talked about our commitment to financial aid and to being aggressive in controlling costs. There is a third factor to keeping a Michigan education affordable and exceptional: Our partners in the worlds of philanthropy and business.
The University of Michigan enjoys some of the most dedicated alumni in the world. They demonstrate their faith in us by investing in the academic enterprise. These are dollars that could go elsewhere, but instead they come to Michigan – the university and the state.
In our last capital campaign, donors were extremely generous in support of our students and faculty, as well as innovative programs and facilities.
We are now preparing for a new campaign, and while we have not yet set a goal, we do know our top priority will be financial aid. I know our donors will not let us down, because they want tomorrow’s students to enjoy the same exceptional experience they did.
And Michigan’s business community is a voice and a partner we cannot, and should not, ignore.
We all know Michigan’s economic landscape has shifted dramatically – from union jobs in the auto industry that required only a high school diploma, to tech-oriented positions that demand at least an associate’s degree.
The Business Leaders for Michigan is a consortium of CEOs, familiar to most of you, who see the problem firsthand, because their companies need college graduates to prosper.
Their message is direct: our state literally cannot afford an undereducated workforce.
When you are members of a committee that determines funding for Michigan’s universities, you can expect presidents like me to lobby for the importance of higher education.
But when our business leaders – the CEOs of Meijer, Dow Chemical, Steelcase, General Motors, and many more – when they say we must invest in Michigan’s universities, that is real, it is objective, and it is imperative to our future prosperity.
And we know how to do this. We know how to prepare tomorrow’s workforce and leaders. The University Research Corridor – Michigan State, Wayne State and U-M – was responsible for close to 32,000 graduate and undergraduate degrees in 2011. That is more than any university innovation cluster in the country.
Our latest graduates – the Class of 2012 – have moved on to the next chapter in their lives.
They arrived on campus just weeks before the collapse of Lehman’s. It was a rather discouraging four years from a financial perspective.
But leaving Ann Arbor, they were optimistic. In general young people are an optimistic lot, which is why I enjoy my job so much.
We know from research that Michigan students want to give back to society. They are particularly committed to building a sustainable world, improving our schools, and stabilizing the economy.
And they leave college with a strong appreciation for diversity and all its benefits. That will serve them well in the many different paths they take in life.
We have been doing this kind of work for a long time – educating young people, building leaders, and contributing to our state and nation.
In four years – 2017 – we will have an opportunity to reflect upon our legacy, and our future, with U-M’s bicentennial.
Michigan has done so much to shape public higher education in this country. And it is because of a commitment – a commitment by state leaders such as you and by scholars through the decades – that our state will offer exceptional opportunities for quality, affordable higher learning.
We will use the bicentennial to reflect on the institution’s impact, as well as explore how to shape education, and society, in our third century. We need to ensure that our citizens are the best educated in the world.
It is a conversation all of us need to engage in – the value and return of investing in our public universities.
I look forward to our conversations – today and moving forward – as we work together for a productive, prosperous future for our state.