Michigan tuition prices are lower than advertised, but sticker shock hits low-income students hard

When students begin shopping for higher education options, one of the greatest deciding factors is affordability. But many smart, low-income students in Michigan get sticker shock from the high tuition prices and never apply, unaware that the actual prices they would pay to attend these schools are much lower. 

Although the tuition prices for Michigan’s 15 public universities may scare families away from applying to these schools, an Advance review of years of data shows there is significant financial support for low-income students to help cover the cost of college.

Laura Rall is a University of Michigan student and president of the student organization Affordable Michigan, which advocates for affordability around tuition, food and housing. She said that before she applied to U of M, she wasn’t sure how her family would be able to cover the costs.

“Literally the first thing out of my mom’s mouth was, ‘How are you going to pay for that?’ And as a 17-year-old, money was not on my mind,” Rall said. “As a low-income student, when I applied, I had no idea that U of M does this need-based aid for students like me.”

The Advance examined data collected by the Hechinger Report, the Education Writers Association and the Dallas Morning News that shows that Michigan’s public universities advertise high tuition rates, but most students who qualify for federal financial aid will never pay them.

Tuition Tracker, a tool that compares sticker prices to average net prices for community colleges, public universities and private universities around the country, was also utilized. This uses data reported by each college via the Department of Education’s Integrated Postsecondary Education Data System. The Advance‘s interactive charts of tuition at all 15 public universities follows the story.

The sticker price is the full cost a typical full-time student, without assistance from financial aid, would pay for an academic year’s worth of tuition and fees, books, room and board and other expenses.

The net price shows the cost of these schools with the consideration of financial aid. It is calculated by subtracting the total of a student’s grants and scholarships from the school’s full tuition price. But the net price data only represents students who receive federal financial aid, such as Pell Grants or federal student loans. 

In the United States, about 63% of students receive grants or scholarships to help pay for college, according to data from the U.S. Department of Education. 

The public universities in Michigan are: University of Michigan, Michigan State University, Grand Valley State University, Central Michigan University, Western Michigan University, Saginaw Valley University, Michigan Technological University, Wayne State University, Oakland University, Eastern Michigan University, Northern Michigan University, Lake Superior State University, Ferris State University, University of Michigan-Flint and University of Michigan-Dearborn.

Bob Murphy, director of university relations and policy for the Michigan Association of State Universities, says Michigan is a “high tuition, high aid state,” meaning sticker prices at these universities are much higher than what many students are going to end up paying.

He said these higher tuition prices actually makes college more affordable for some students. About 37% of students will pay full tuition prices, such as the students who don’t qualify for financial aid, and out-of-state and international students. These students’ tuition dollars will help subsidize the cost of tuition for students who can’t afford the full price.

“At the end of the day, these universities know they are considered high-sticker-price schools,” said Murphy. “And that wasn’t the case a couple of years ago, but this is the national result of what happens when you have disinvestment in higher education.”

https://www.michiganadvance.com/blog/michigan-ranks-44th-nationally-in-per-resident-support-for-higher-ed/

Doing the math

The data show that at the University of Michigan, for example, students from families earning between $30,001 and $48,000 received enough financial aid to bring the average net price down to $6,041 for the 2019-20 school year. The sticker price for this school year at U of M is $31,182.

At Grand Valley State University, students from the same income bracket paid a net price of more than double that ー$13,941.

But U of M has taken a unique approach to college affordability. In 2018, the university rolled out the Go Blue Guarantee, a program that offers four years of free undergraduate tuition for in-state students whose families earn $65,000 annually or less. 

The program has covered tuition costs for approximately 1,700 students since its launch, and in its first year, applications from students in the qualifying income bracket saw a 26% increase, according to the Detroit News. 

Rall qualified for the university’s free tuition program, which at the time was not named the Go Blue Guarantee or advertised as widely.

She said that while she was applying for college, she considered Western Michigan University or community college, which seemed to be the more affordable options, until she received her financial aid package from U of M.

“I know students who do not apply to U of M because of that sticker price,” Rall said. “And that was one of the reasons they put a name on the Go Blue Guarantee. Now the university is seeing more students applying, because the students know that there is a chance they can go here and get it paid for.”

Last month, Wayne State University introduced the Heart of Detroit Tuition Pledge, a program that offers free tuition to students graduating from Detroit high schools and Detroit residents who are earning their high school diploma in 2020 or later.

https://www.michiganadvance.com/2019/10/23/wayne-state-to-offer-free-tuition-for-detroit-students-residents/

But with or without these university programs, low-income students can benefit the most from understanding the difference between sticker price and net price at all of the public universities in Michigan.

Michigan ranked 44th nationally in per-resident support for higher education, according to data compiled by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers (SHEEO).

In October, the U.S. House Education and Labor Committee passed legislation that would fund states that invest in their public colleges and universities, increase federal education grants, crack down on “predatory” for-profit colleges and strengthen supports for low-income students and students of color. However, the legislation isn’t expected to get through the GOP-led U.S. Senate and signed into law.

https://www.michiganadvance.com/2019/10/31/u-s-house-dems-advance-sweeping-effort-to-lower-higher-education-costs/

Murphy says that with tuition prices on the rise and low state appropriations for higher education, it’s important for Michigan students to take advantage of the Free Application for Federal Student Aid (FAFSA).

The FAFSA determines students’ eligibility for federal grants, work-study and loans. For the 2019-20 award year, more than 396,000 students in Michigan have applied for financial aid through FAFSA, according to data from U.S. Department of Education’s Federal Student Aid office. 

“There is general aid available at all the universities,” said Murphy. “But you have to fill out the FAFSA first.”

Below are the average net prices by income bracket for all 15 public universities in Michigan compared to their advertised tuition prices. The data shows that while tuition is projected to rise for the 2020-21 school year, based on data from the Tuition Tracker, there is a large difference between what students in the bottom income brackets are expected to pay.