Higher Education Calamity

By on September 20th, 2012

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Tom Watkins

Tom Watkins

Higher Education Calamity

September 21, 2012
It is a subject few want to address but may be the next big crisis facing Governor Snyder’s administration.
No, it has nothing to do with the City of Detroit, but everything to do with the future of higher education in Michigan.
Education DOES matter.
There has been much debate swirling around our public schools and municipalities which have failed to lead, manage, and control spiraling health care and pension costs and are now engulfed by debt, layoffs, service elimination and in some cases, the appointment of emergency managers or draconian consent agreements to reign in costs and mismanagement.
Why should we think that some of our institutions of higher learning may not be subject to these same pressures and maladies?
According to a recent story in The Economist, The College-Cost Calamity, many American universities are in financial trouble and have been piling on debt at alarming rates.
Between university debt, changing demographics, legacy costs, competition from for-profit educational institutions, soaring student debt, state funding cut backs, philanthropy drying-up and skyrocketing tuition and fees, we may be heading for a crisis.
Many universities have gone on building sprees at a time when technology, especially e-learning with its anywhere, anytime, any place, any pace learning may make the need for dorms, huge lecture halls and other institutional edifices obsolete.
There is no argument about the need for higher and better skills to thrive in the hyper-competitive, disruptive, transformational, knowledge economy where ideas and jobs can and do move around the globe effortlessly. The questions remains: are our institutions of higher learning positioned to help take the citizens of Michigan where we need to go to be able to collaborate and compete on the world stage?
Clearly, Michigan Future Inc. (www.michiganfuture.org), led by Lou Glazer, has demonstrated the value of higher education and has been a strong advocate for additional public investment in higher education.
Yet, we would be wise to give pause and study the financial status of our universities, asking how to make them stronger moving forward. Are we receiving an adequate return on our investment now and how should we best invest for our collective future?
Bain and Company and Sterling Partners released a report that studied the balance sheets of 1,692 universities and colleges between 2006-2010 and discovered one-third were significantly weaker than several years earlier. This should not come as a surprise, as the study covers the period of time of the worst economic meltdown since the Great Depression. Yet, it should be a canary in the coal mine reminding us of potential trouble brewing.
There is no doubt that our major flagship universities, such as Michigan State University and the University of Michigan will weather the storm. They have solid leadership and endowments to help smooth out the rough patches they have been managing for some time.
Yet, just how stable are Michigan’s smaller institutions and how will they manage these pressures going forward?
I can imagine the hate mail from The Presidents Council, faculty, students and alumni from Michigan universities for daring to raise the issue. Put your hands down, don’t go on auto pilot and email me nasty notes. I am on your side and value education and know it will be our state’s and indeed, the nation’s salvation.
Yet, I also know that the first step in problem solving is problem identification and that simply sticking our collective heads in the sand will not make problems disappear. With leadership, clear thinking and
time, we are capable of solving any problem.
I suggest that before a calamity hits Michigan, it is wise to ask ourselves: How stable are our universities? What can we do to strengthen them to assure they remain strong to help prepare us for our increasingly global knowledge economy? How, or should we change the investment we make in higher education? Will an increase in state funding using the funding formulas of the past produce the results we need today or tomorrow? Do we have the right number of universities, concentrating on the appropriate academic areas, to drive knowledge, innovation, creativity and job and wealth creation in the future?
We do know that significant changes have impacted the private sector and K-12 school districts across the state. Have our universities kept pace with necessary change? Have our institutions of higher learning been leading change, reacting to it or ignoring the new realities?
Perhaps the answers to these questions will demonstrate we are heading in the right direction –or not.
How stable are our institutions of higher education? A calamity and crisis are terrible things to waste.
Tom Watkins served as Michigan’s state superintendent of schools, 2001-05. He is a U.S./China business and educational consultant. He can be reached at: [email protected] Governor Snyder is currently in China on his second trade mission to that country in two years. Tom Watkin’s called for the need to build Michigan-China trade relations three years ago this week. (http://domemagazine.com/blogs/cov0909)

 

Tom Watkins

Tom Watkins has an eclectic career in both the public and private sectors. He served the citizens of Michigan as state superintendent of schools and director of the department of mental health. He has held leadership positions in higher education, business and behavioral health. Watkins has a interest and passion in all things China and has written hundreds of article on the value of this most important bilateral relationship in the world today.

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Rocco
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Rocco

Tom, I couldn’t agree more! We the people need to stop and question the old para dimes with regards to education. I would be happy to contribute to the discussion when you commission the group. Keep me posted.

roger march
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roger march

Tom Watkins, you have again put light on important issues before others and are you be commended for it. From my observation of seeing how universities run, I agree attention need be paid to this now before another crisis ensues….

KP CHEN
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KP CHEN

To effect a major change, often, starting from private and/or non-profit sectors, is easier than that of a public sector …
Before becoming a main-stream icon, enterprises could live a long span in their ‘submarine’ stage … under radar, under water, under no men’s notice …
To engineer that paradigm shift, is extremely difficult, particularly, when the financial and political incentives are not clear …
However, stuffs do happpen, things do happen, miracles do happen.
West or East. Past or Present.

Jon K.
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Jon K.

Our universities are our jewels and way to the new future. We must do what we can to safeguard them as assets, even if it means we spend a bit more.. Enough said!

jtodd
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jtodd

Good article Tom. Hopefully the universities can outlast the current crop of rightwing politicians incharge and make necessary improvement inspite of them. There solution is to force the public universities to become private institutions.

David Waymire
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David Waymire

I work with the Presidents Council. A couple stats might help the discussion. State support for higher education has been cut by 29.2 percent in the last decade. In that same period state support for corrections has increased by 24 percent, and we now spend $2.0 billion on corrections vs. $1.3 billion on higher ed, according to the Senate Fiscal Agency. Business Leaders for Michigan, which is advocating a $100 million a year increase for higher ed for each of the next 10 years (assuming our universities are of high caliber), has figured that if you take per student appropriations… Read more »

Tresa S.
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Tresa S.

Spot on in my opinion.
The state has been cutting higher ed while they have gone on a spending spree and are operating as though the world has not changed around them.
As the author so aptly points out– the day of doing things as they have always have– is coming to and end.
Is anyone paying attention?

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