State of the University

February 14, 2012

President Lou Anna K. Simon

Thank you very much. This is really a day of celebration of the extraordinary work of our faculty, staff, and students; the way that they inspire others to be great; the way we break the frontiers of knowledge; and the impact we have, literally, around the world every day. It is also a time to reflect on our heritage and the tensions that that represents as we seek greatness every day. The land-grant university legacy had inherited a lot of tensions. We were to be good enough for the proudest—competing with all the brand names—but, at the same, time be open to those who were from very humble backgrounds who strive for greatness but may not have had the opportunity to do so before they came to Michigan State.

We had to provide an education in the classical sense that was to compete with all of those brand-name institutions and be really an insightful voice for the human spirit and, at the same time, roll up our sleeves and do things that were very practical for the problems the world faced then and now today. We also had to be sort of grounded in Michigan—being concerned about Michigan but also having this big global reach. In those tensions, we found our greatness. And as we move forward through what are still going to be pretty rocky times in an economic climate that is very, very uncertain, we need to take advantage of those tensions to make sure that we truly are—and remain—exceptional.

As I thought about today and the comments around public higher education, I thought about what would John Hannah think about today? Now he might be a bit concerned about the commercialization of athletics. He, though, put us in the Big Ten and imagined that to be something that had more good than bad with respect to the way it would support our academic programs. He was a part of a time when research was growing dramatically, and he pushed us to be one of the best in the world in research. He really strove for us to be a member of the AAU, and he worked really hard at that while he sort of spent his time around Michigan talking about current issues. And I think he’d really be pleased with the growth of our research dollars and the fact that last year we moved between 65th to 50th in terms of the number of federal dollars. And that growth has to continue and must continue.

But I think he’d be really disappointed in the fact that the public covenant with public institutions like Michigan State has been stretched if not broken, in part. We were founded to be able to do something special as a uniquely American institution. In the 1950s and ’60s when John Hannah was really growing this place, it was a time of unprecedented growth in research dollars and in support for universities. And now we’ve sort of lost that sense that a university education, the work that we do, is a public good. It doesn’t simply rebound to the people who are paying for it directly. It rebounds to all of us in terms of our international competitiveness, our capacity to prosper in these very, very uncertain times. And all the things that are happening now in the political system in which cost is a big issue, he’d be worried about that. I think he’d be really pleased about the big increases we’ve done in financial aid. I think he’d probably believe that we’ve been able to keep 75 percent of our students from families with $125,000 or less. I think he’d be pretty pleased that our out-of-state enrollment is about what it was in the 1960s. We’ve been, unfortunately, turning away many Michigan students who really want to be here, because we’ve grown almost to our capacity—so he’d be worried about that. He never really liked the idea of raising private dollars. It is not the most pleasant task in the world, I must tell you, and I can see why he wanted to sort of push that aside. But it is very much a part of our existence today and something we’ll have to excel at as we have over the last year in raising over $94 million in just the first six months of this year. And we’re going to continue to push that because it is part of the public trust that is 21st-century education in America.

But I think he’d be really worried. Because if you think about what’s happening and the way we’ve dealt with our budget reduction—the state has cut our budget about 26 percent in actual dollars over the last 10 years, and if that number had been the same for the number of students and inflation, we would have had $150 million more in our budget. And that is a pretty good-sized number. Now we have addressed those issues by doing $110 million in reductions. We’ve been able to forgo salary increases—we want to thank all of our community for doing that—and we’ve also been able to add to that number by readjusting our health care plans about $28 million. The sum of those numbers exceeds that $150 million number. But families still feel the pressure because they have to absorb the inflationary increase, not only on their part of the budget but on the total part of the budget, and that tends to grow tuition.

Now institutions like ours across the country have begun to solve that problem because they’ve raised tuition as well—which is why it’s a federal issue, not simply a Michigan issue—by taking more and more out-of-state students. We’ve not done that. We’ve taken more, but we’re about to the level we were before. Our peers are at 30 and 40 percent and growing. Now if we were at the average of the Big Ten, we’d have $100 million more to spend. Think what that would have done for reducing tuition for in-state students. But at the same time, we have all those in-state students who want to come to Michigan State. So the moral dilemma that part of this tuition discussion—and this disinvestment by states in public higher education, not just in Michigan—presents is what do you do about that number because you know that you could hold down tuition for in-state students if you simply get more out-of-state students. And that’s where the incentive is, but is that the right thing to do? Is that the right thing to do to grow this state? Is that the right thing to do to really grow the country? Because those students deserve this kind of world-class education that we’ve been able to develop over this period of time—they deserve that chance. They deserve that chance because we are a top-100 place in the world. And employers around the world understand the value of our students, which is why the number of employers has gone up this year who’ve come to visit our students. And we were ranked in a multinational survey of CEOs of companies that have brand names across the world second in the Big Ten behind Northwestern as the best place recruit our students. That’s a validation of what our faculty, staff, and students have done in this very, very difficult time, and we thank them enormously. But is that the right public policy?

So as I think about this discussion—and you can go on our website because we’ve been very transparent about numbers and metrics, whether you call them scorecards or benchmarks or all those kinds of things. If you go on the website, you’ll find all of those numbers associated with this set of comments, so I encourage you to do that along with the President’s Report. But I want to focus on a couple of things that are really important to us going forward. One is then how do we deal with this issue of cost of education? I’ve talked with you about whether the states are going to come through with their part— and the federal government. But what can we do? What can we do? What we know right now is that, if you look at the class of 2010, that about 45 percent of those students are leaving here with what I would call educational debt. That’s debt associated directly with their cost of education. That does not count credit card debt, okay, or other things that might have accrued along the way. But this is their sort of direct educational debt. We know that the average for those 45 percent of our students is about one year’s worth of cost, including housing. So you immediately come to the point that if there are ways in which we can be much more innovative and creative—and still have students graduate with the knowledge, skills, and talents, and passion it takes for them to be wanted by all of those employers and be the lifelong learner that will make a difference in the lives of their communities and their companies and their industry across many years of work—then we need to keep that objective and never lose it.

But can we do some things that would make it easier for students to get through in four years? Or can we possibly make it easier for those students to be able to finish up their baccalaureate requirements earlier and take on some master’s or other advanced courses so they have more value in the workplace? I’m really pleased to tell you that Provost Wilcox, Senior Associate Provost Youatt, the academic leadership, faculty in many, many colleges have taken on that challenge already. And you’ll be hearing from Provost Wilcox this week, tomorrow, about the specifics that go with this. We’ve look at policies, we’ve tried to spawn curricular innovations, because if we can do that, that’s going to be one of the biggest differences in how we think about the cost of education against the value of the degree that we provide. And that has to be a centerpiece going forward. It’s not about just being more efficient and cutting corners, it’s about producing this world-class product—these students that are in demand around the world who can go anywhere in the world—and at the same time give them a chance to leave here with a bit less debt. We’ve been able to grow the graduation rates because that is another big cost of attendance. If you don’t graduate, it costs you a lot of money because you never get the return on the investment that you have. So growing graduation rates is very important, but this four-year issue is also something that we’re really dedicated to make a difference. And it really is something that I’m very proud of and will be part of the centerpiece as we try to refresh Boldness by Design.

The second piece that we really have to do is continue to grow these research dollars. Now I know the news about FRIB wasn’t as positive as any of us would have liked because FRIB is one of those continuing struggles from the moment that big idea occurred. But if you think about FRIB, it started in the basement of a building with the dream of John Hannah. It’s not something we crafted just to be able to go after some money. We’ve been able, as I said, to grow our research dollars, and that’s going to be really, really important. But FRIB represents a budget in the federal government, where research dollars, particularly basic research, are coming under great scrutiny. So the fact that we’re in the budget is the good news. The fact that we’re not big enough is bad news. And I’m really confident that with the support of our congressional delegation, the people who’ve been part of the FRIB advisory committee, and all of you, we’re going to be able to get a good hearing on the importance of a project like FRIB.

But it represents the importance of basic research, the things for tomorrow. And we as a community, those who support Michigan State University, may always question whether there’s a relevant point for all of that. But when you think about all of the things in our daily lives that benefited from research that nobody thought was really important at the time—some idea that had its genesis in a faculty member working in a lab, sort of like cisplatin and carboplatin, the cancer drugs that Michigan State did—you don’t know at the time that it’s going to be that earth-shattering discovery. But you know as an institution you have to keep putting money and resources behind that work because that’s the responsibility of an institution like Michigan State. What we’re doing now is having a set of conversations with our faculty—our young faculty, our early career faculty, as well as those distinguished faculty, some of whom are behind us today—about what kinds of things do we need to do for the future to assure that we’re planting the seeds today that will grow into those pillar programs for tomorrow. It’s easy for us to rattle them off—in being the number one in nuclear physics—but it started somewhere. The work we have in areas like hospitality business and packaging that were not always there . . . The list can go on and on.

We have to have your support and the capacity—and that’s where private dollars come in as well—to be able to plant those seeds today, knowing that not every one of those is going to grow strong. But that’s the greatness of a university, and I’m really pleased that the faculty, staff, the students have engaged in those kinds of conversations, and you’ll be seeing more about those in the next three or four months as we close those discussions and refresh the priorities under Boldness by Design. But let me assure you that no matter how difficult the circumstances and whether our luck is good or bad in the sense of Jim Collins and Great by Choice, we’re going to take the responsibility to try to work as hard as we can to things that look like bad luck—you might call FRIB in that category—to try to work with the way we can to turn bad luck into an opportunity. Now we’re going to try to take advantage of all the good luck that is given to us in the faculty, the staff, and all the talent that we have—all of you—in ways to not simply take it for granted but to move it in a direction and make sure this university remains strong in the years ahead. And that for the young people who are a part of our faculty who will be sitting behind some president 10, 20, 30 years from now, they can proudly say that they were part of Michigan State University and that they can proudly say that with all of you that they’ve made a difference—not simply in East Lansing but around the world. So thanks for all that you do on behalf of Michigan State.