Office of the Vice President for Global Communications

Monday, April 19, 2010

Provost Sullivan touts benefits of
higher education in talk

What’s the return on investment in higher education? Provost Teresa Sullivan, a sociologist and the university’s chief budget officer, has an ever-growing list.

“This past month, nine of the 15 small firms reporting new hires in Ann Arbor were University of Michigan spinoffs or were started by student entrepreneurs,’’ Sullivan told a meeting of the Wolverine Caucus, a group of U-M alumni and friends who work in and around the state Capitol in Lansing.

Besides the private gains (a typical college graduate earns $1 million more in a lifetime than a high school graduate), Sullivan has a long list of public gains.

College graduates are more likely to vote and participate in policy discussions or campaigns, more likely to participate in cultural activities, more likely to be open to new ideas, more likely to read to their children, and they increasingly want to live and work with people with a similar level of talents, boosting the economies of areas where larger numbers of people have college degrees, she said.

“The individuals who will shape the future will be those who have the experience of higher education and thus the talents to work effectively in the new economy,’’ Sullivan said. “Equally important, with their resident faculties', colleges' and universities' help to provide the critical mass needed for innovative economic activity, our society gets a double benefit when we invest in higher education.”

And yet, Sullivan recalled working at the University of Chicago, applying for grants when it was assumed that the overhead costs of grants would be larger than the direct costs of research itself while public universities like U-M get half as much for overhead because the federal government assumes that states pay for buildings at public universities.

If U-M received the same ratio of overhead support on its research grants as private universities like Johns Hopkins and Harvard do, U-M would have gained another half billion dollars in support besides the $1 billion it generated last year, she said.

Instead, states like Michigan have gone from providing 70 percent of a public university’s budget to less than 30 percent. At U-M, the state appropriation accounts for just 22 percent of the general fund budget for the Ann Arbor campus.

“The companies that are successful — like Google to name a big one, or Nexgen Sciences, a small biotech firm in Ann Arbor — are those that are entrepreneurial,’’ Sullivan said. “They seek new ways to do things and hire employees who are imaginative and adapt easily to change. ‘‘

She said a recent proposal from California Gov. Arnold Schwarzenegger to pass a constitutional amendment assuring that no less than 10 percent of California’s budget goes to higher education and no more than 7 percent goes to prisons was worth discussing because it clearly sets priorities. Michigan is one of a handful states now spending more on prisons than higher education.

She also praised proposals from University of California President Mark Yudof and others calling on the federal government to play a greater role in supporting the infrastructure and operating costs of research universities since research provides a public good to the entire nation.

“Research has found that individuals with a college education spend more time and money on cultural activities,’’ she said. “This contributes to a higher quality of life for the individuals, both adults and their children. It may also translate into increased support for the arts generally.’’

Asked what would be a minimum level of support from the state of Michigan, which has been cutting higher ed support for the past decade, Sullivan said she at least would hope for state support to “stabilize’’ so that universities could plan. She contrasted that with Illinois, where lawmakers have appropriated higher ed support but not paid any out since July.

“Be honest about cuts, don’t try to conceal them,’’ she said.

One approving legislative aide quipped, “If you think education is expensive, just try ignorance.’’