Feel free to break this promise

Phil Power calls the Michigan Promise Grant “a good first step, but . . . not a solution for the real problem.” He only gets it half right. The grant is not a step in any direction. By the time future college students collect the additional $1,500 offered by the grant, rising costs will have eaten into the increase. On the other hand, Power is correct when he says it is not a solution.

In September, the National Center for Public Education and Higher Education released Measuring Up 2006, their national report card on higher education. Not surprising, Michigan earned an “F” in affordability. Rather than try to make college more affordable through scholarships and grants, Michigan needs to structure higher education funding in a manner that provides incentives to keep costs and tuition down.

Also, Governor Granholm needs to realize that just throwing more money at higher education is not going to make our state “enormously competitive.” Richard Vedder, a professor of economics at Ohio University, has extensively studied the relationship between economic growth and state appropriations to universities. He found that if a correlation exists, it is weak at best. If Granholm hopes to turn around this state’s economy, spending more money on colleges is a poor route to take.

Besides, let’s not forget the law of unintended consequences. Larger grants raise the demand for college. This higher demand, without a corresponding increase in supply, results in higher prices. The grant increase gets consumed by the price increase and college is no more affordable than when we started.

The real problem is university spending. In his studies, Vedder has found that in the past 20 years, per-student spending rose about 70 percent across the country. Unfortunately, since 1976 only 21 cents of each new dollar in per-student spending has gone toward instruction. Instead, tuition and state funding increases have gone toward lower teaching loads, more travel, and higher salaries.

Before students follow Power’s advice and send thank you notes to the governor, they should realize it’s not much of a promise.

[Letter to the Editor - Farmington Observer. Published 12/21/2006.]