MSU Tuition Restraint Debate Reaches Committee

It now looks like the state will probably give Michigan State University $18.3 million for keeping its tuition costs in check despite the university’s recent 9.4 percent tuition hike.

As reported previously by Capitol Confidential, MSU students will pay 9.4 percent more for tuition this fall than last year, but MSU argues that technically the increase is just 6.9 percent. If this claim by MSU is accepted, the university would qualify for an $18.3 million tuition restraint incentive grant.

At the moment, indications are that MSU will pull it off.

The person who will apparently have the final say in the matter is State Budget Director John Nixon. Nixon is checking the situation over with attorneys and, according to a well-placed source, hasn’t made a final decision yet. However, there are indications that he’s leaning toward giving MSU the grant. Evidence of Nixon’s probable decision also came earlier this week when Gov. Rick Snyder told reporters that technically MSU probably qualifies for the money.

The Snyder administration and the Legislature created the tuition restraint incentive grant as part of this year’s budget. Under the plan, universities that hold their tuition increases to less than 7.1 percent would get additional state “incentive” funds.

According to an analysis by the House Fiscal Agency (HFA), MSU is increasing its tuition by 9.4 percent and doesn’t qualify for the grant. But MSU officials argue that the university actually hiked its tuition last year before the grant even existed and then didn’t charge students the full price when federal stimulus dollars became available.

MSU figures its increase at 6.9 percent by using the tuition level it established last year, but didn’t really charge, as the starting point of its calculations.

If Nixon accepts the MSU argument, the reactions of some lawmakers could be less than harmonious.

On Thursday, members of the House Appropriations Subcommittee on Higher Education grilled MSU officials during a hearing at the Capitol. Republicans on the committee seemed less than sympathetic to the university’s position.

“For a student who attended MSU last winter and is now signing up again for this fall, it’s a 9.4 percent increase,” said Committee Chair Rep. Bob Genetski, R-Saugatuck. “Do you believe this was really the intent of the legislation?”

Mark Hass, MSU’s assistant vice president for business, repeatedly responded to such questioning by stressing that the university simply had a higher tuition rate last year, but had given students a break on the cost.

Rep. Kevin Cotter, R-Mt. Pleasant, said that he resented MSU playing “these kind of games” with the tuition restraint incentive grant.

“I resent the implication that we’re playing games,” Haas responded.

Rep. Joe Haveman, R-Holland, asked a series of questions about MSU not bothering to inform lawmakers or the administration about how its tuition situation might present some interpretation issues until the HFA came up with its assessment.

“We believed that we would qualify,” Haas responded.

“We can disagree on whether or not you qualify legally,” Haveman responded. “But your tuition increase clearly doesn’t fit the Legislature’s intentions about tuition restraint.”

As the MSU tuition drama unfolds, Wayne State University seems to be waiting in the wings. WSU claims it has held its tuition below the 7.1 percent mark, while the HFA assessment has pegged the increase at 8.8 percent. It seems likely that if Nixon accepts the MSU argument, the WSU argument would stand up as well.

If MSU and WSU end up getting the money, would other universities in the state that held their tuition below the 7.1 percent line take exception?

“That would be assuming that MSU was doing something wrong,” said Michael Boulus, executive director of the presidents council of the State Universities of Michigan. “No one has shown that that’s the case. There have been no rumblings from other universities about this.”

“Both MSU and WSU have kept their tuitions within the required levels, based on the way the legislation was drafted,” Boulus continued. “Everything has been done within the law. We’ll just have to wait and see what happens.”