Disappearing stimulus dollars, eroding levels of state funding and rising costs are creating a lethal cocktail for colleges nationwide as universities struggle to keep tuition raises to a minimum.

Budget containment measures at universities have become increasingly drastic in the last few years, as administrations have been forced to add student activity fees, consolidate campuses and slash salaries in attempts to keep tuition levels competitive. In spite of these measures, some schools, including the University of Georgia and the University of California, have seen increases at 30 percent and higher.

Grand Valley State University was not exempt from these challenges as administrators set out to create a budget for the 2010-2011 school year. For the second year in a row, tuition rates increased 5.3 percent, making undergraduate tuition $9,088 per semester.

The increase kept GVSU below the state average tuition at the 15 public universities, but not without cost. Labor unions representing the police force and the maintenance and grounds staff both agreed to pay freezes for their workers, as did the faculty. Vice President of Finance and Administration Jim Bachmeier praised the willingness of the staff to make sacrifices for the student body.

“I thought it was really a fabulous gesture when the faculty’s Salary and Budget Committee said, ‘We get it, things are tough, we know our students are hurting and we can get by without an increase this year,’” he said. “I think it speaks boatloads about our faculty.”

In addition to pay freezes, faculty are shouldering more of their medical expenses this year in an effort to keep tuition raises to a minimum. The university also prioritized spending, putting off non-vital technology purchases and opting to leave some staff vacancies unfilled.

“(The faculty) understood the nature of the economy here in Michigan, how it’s impacting our students and their families, and this was more than just symbolic. It really is substantive,” said GVSU President Thomas J. Haas.

Adding to the university’s struggles were low per student appropriations from the state legislature. Because state funding is not based on enrollment dynamics, GVSU receives $2,856 in per student appropriations from the state despite a $3,775 per student floor funding level and a per student average of $5,502, a system that President Haas criticized.

“They basically give you what you had last year, and if your numbers of students go up you have to operate with less dollars,” he said. “I call that irrational.”

Over the summer, Haas testified to the House Higher Education Appropriations Committee that he would cut GVSU tuition 5 percent if they were to receive the floor funding level for appropriations. While the state budget has not been finalized, Haas said that at this point the decision was unlikely.

“If you bring in students, you should be able to serve them with the resources that we have and not be punished in a way financially because we’re doing what the state wants us to do, and that is to graduate an increasing, talented student body that will stay here in the state,” he said.

Bachmeier said that while he has been disappointed in the legislature’s low funding for the university, he understands why universities are a frequent target of budget cuts.

“If you look at state budget, you can throw children off of food assistance, you can throw poor people off of medical assistance, you can let prisoners out, or you can reduce funding to universities,” he said. “In some ways their choices are not very good.”

According to the 2010 General Fund Budget, the university lost $62 million in state appropriations as well as $1.7 million in stimulus funds due to cuts from higher education funding at both the state and federal levels. The tuition increase brought in $80 million in revenue.

Kate Pew Wolters, chair of the Board of Trustees, defended the budget.

“A college degree remains an essential tool for individuals and our entire region,” Wolters said in a press release. “We approved this budget with confidence that the university is attentive to students’ academic and financial needs. Helping young people graduate and assume leadership roles in our state is vital to our future.”

Haas said that although the university has had to make some sacrifices in the budget, the cuts have not come at the cost of the student experience at GVSU.

“What we have here is an ethos, a culture that’s student-centered and people will say ‘I’m just gonna have to work a little bit harder so that students are successful,’ and that’s the magic of this place, I think,” he said.

This year, 22 percent of the university’s budget came from state aid according to the Office of Institutional Analysis, compared to 47 percent in 1991.

But long-term planning has helped the university cushion the blow of decreasing state aid, Bachmeier said.

“We’ve been more aggressive and we got aggressive earlier in the game than some of the other universities,” he said. “When there are fewer dollars to go around, necessity is the mother of invention. The fact is that we have been somewhat limited and constrained. We’ve made some decisions that have been hard ones but good ones, and they made us better.”

One key element of GVSU’s plan to keep costs down in the future is to increase 4-year graduation rates. Currently GVSU is ranked 3rd among the 15 public universities in Michigan, but Haas said he believes the university can do better. This year, he introduced the Grand Finish scholarship for incoming freshmen, which gives any student who completes 90 credits by the end of their junior year a $1,000 grant.

Haas said he believes the incentive will not only decrease costs for students but also for the university, as higher 4-year graduation rates would create more stable enrollment levels.

“This is a promise that I’m making, and I think it’s a very critical one,” he said.

In spite of the higher tuition cost, GVSU slipped from 9th to 10th in the costs of Michigan’s 15 public universities, making the university less expensive in relation to other schools. Financial aid also increased by 6.3 percent, helping to cushion the tuition increase. According to Marcus Wood, the Financial Aid Systems Manager, the average gift aid award this year is $5,649, with nearly $64 million in total gift aid distributed thus far.

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