Investing in Higher Education Reaps Rewards for All

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September 28, 2011 

“Tuition is SO expensive,” a local business owner told me. She shared the sacrifices her family makes to keep their oldest son in college.

“My husband has been away for three weeks,” she continued. The time-and-a-half her husband earned working out-of-state made the difference between sending and not sending their son to college.

At a time when most agree the road to prosperity leads through college, the state is paying less and struggling families are paying more for college. Deep budget cuts this year forced most colleges into a 5.5% tuition increase. Many families tell me it’s harder to pay college bills.

Parents know a child’s future is improved with a college education. Average earning for a college graduate more than doubles the average earning of a student without a high school diploma. Future jobs increasingly require post-high school education.

Helping our best and brightest obtain a college education helps raise the earnings of the entire state. According to UW officials raising the education level of Wisconsin residents to that of Minnesota means $29 million more in the pockets of folks in our state.

Thirty-two percent of Minnesotans are educated at the bachelor’s level. Using 2008 statistics, Wisconsin compares at 26% of the population educated at the bachelor’s level. Raising the number of college graduates to Minnesota levels means an average income jump of nearly $5,000 a year.

We live in an increasingly interconnected world. Our children and grandchildren compete with children on the other side of the globe. With the number of college educated workers in Japan (54%), Korea (53%) and even Canada (55%) double that of Wisconsin, we face future challenges.

As families struggle to send youth to college and Wisconsin lags neighboring states in the college educated, the gap between the rich and poor widens. Poverty numbers from the 2010 US census reinforce the concern about declining income. Last week’s Eau Claire Leader Telegram reported the typical Eau Claire County family saw their real income drop nearly $5,000 between 2008 and 2010. Less money in people’s pockets means less growth in demand which turns into a cycle of fewer jobs.

Education can lift a family’s earning potential. But a college education is increasingly out of reach for some as tuition increases. This year’s tuition increase comes on the heels of several before it; all in response to fewer dollars from the state.

As UW President Kevin Reilly recently told me, “Wisconsin used to pay twelve cents of every tax dollar to public universities. Now it’s less than nine cents.”

I asked President Reilly about the effect of recent deep budget cuts. Governor Walker’s budget cut a quarter-billion dollars from the UW system. Even before these cuts Wisconsin, compared to other states, ranked only 37th in per person higher education funding.

I learned how the system was coping.

Tuition increases made up one-fifth of the cut. Increased benefit contributions by employees added another 30 percent. President Reilly is navigating the loss of $125 million. Many tasks done by the UW System are being shifted to individual campuses. Some staff retired, others let go.

Keeping quality staff is incredibly challenging. Like all state workers, UW workers faced the equivalent of a 5% pay cut over the past three years. Changes this year mean an additional 8 to 10 percent salary drop. Studies show UW salaries as the lowest compared with peer institutions. Lack of resources means loss of staff and faculty which affect student experiences.

Investing in higher education brings dividends beyond higher salaries for graduates. More income means more tax dollars and a broader tax base; sharing the cost of public services more equitably among all. Spin off companies and others assisted by UW research benefit the state’s economy.

UW officials remind us: prosperous citizens use fewer public services, are generally healthier, are able to contribute to philanthropy and community non-profits and are more engaged in democracy and civic affairs.

Investing in higher education reaps big rewards for everyone. It is an outlay we must be committed to make. Our future depends upon our investment.


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