College Financing: The business of College

I was listening to the radio and recently heard Eastern Michigan University was raising its tuition by 3.8%.  Shortly thereafter I also heard the University of Michigan was also going to raise its tuition but by 6.5%.  What gives?  People are losing jobs so they are not going to be able to afford the tuition as it stands let alone raising it.   In the last 5 years tuition at Michigan’s public universities has risen by 25% but unfortunately many people’s salaries have not risen that much.  The universities attribute much of the increases to less funding by the state.

So why haven’t the universities made cuts to adjust their spending?  Some have.  Wayne state has cut 50 million.  The fact is that the business of college is expensive.  They have to invest in facilities, professors, and research.  This really confirms for me what I’ve been saying for years…college is a business!  In the head offices of the provosts and university presidents there is a keep up with the joneses mentality.  I mean they have to keep building more student or research facilities to attract the top students and facility.  Attracting the best students and faculty builds their reputation even higher.   I’ll give you a personal experience.  Back when I was looking for colleges I looked at Lawrence Tech.  It’s a great school with terrific resources, but at the time did not have any dorms.  I did not go to that school only because they did not have dorms.  Now they do!  How about another, the University of Michigan’s football stadium is one of the largest stadiums in the county.   Its nickname is the Big House.  So is U of M happy to have capacity for 100,000 plus spectators….NO, they are adding private suites and more seating.  I’m sure this project is costing a lot of money but for the university it’s worth it because it will enhance the college experience but also attract alumni donors!

Schools have to add amenities to attract new students.   Have you been on campus to see the dorms?  From what I hear the food is much better also   Colleges need the research dollars to attract top professors and gain recognition which will attract more students.  See the cycle!  One other pusher for colleges is the research money.  Millions of dollars flows to them to conduct research.  Government and private industry studies are conducted on our campuses across the nation.  I was recently watching a special on Modern Marvels.  The show was discussing the US super highway system.  One of the spots featured a test project that Purdue University was performing for the Department of Transportation.  The university is testing noise levels of different pavements.  Sounds boring to most but this project probably means a hefty contribution from the government but it also means a real world application they can give to their undergraduate or even the master’s and doctorate students.  The universities that receive this money will continue to attract the best.

In the universities defense they have a lot of people to please.  Groups like alumni, current students, researchers, professors all have their needs and wants but I still believe they could be looking at how they spend their money and be a little wiser.

What can you do to break their cycle?  Do your homework.  Since college is a business they are in the business to attract students.  They want YOUR CHILDREN.  Yes you have to apply but they really want them.  The first step in your college research is to find out how you stack up against the other incoming freshmen.  How are your grades, ACT/SAT, extra-curricular activities, where are you from, and many other factors?  Too many times I see kids pick a college because their girlfriend/boyfriend is going there or they have had family go there.  Wrong.  Pick your college based on how you stack up and you have a better chance at stacking up on the free scholarships!

Colleges have a mission and understanding their mission will help you to pick the best school for the best price.

What schools is your child thinking of?  Leave a comment below and why you think they would be unique for that college.

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