Those Colleges With “State” in Their Name
In high school, Jenna Duursma sometimes dreamed of leaving home. Growing up in rural Allegan, Michigan, a town she half-jokingly described as “just a bunch of cornfields,” she felt antsy. “To put it bluntly, I wanted to get the hell out of Michigan,” Jenna explained.
But while she toyed with the idea of going to a school like the University of Alabama, paying out-of-state tuition was always out of the question.
Instead, she opted for Grand Valley State University. The regional public institution had a sterling reputation and affordable tuition, and was only an hour drive away from her hometown. “I’m an only child, and my parents were a little bit older, and so that’s kind of the reason why I chose to stay around.” She quickly fell in love with GVSU and with living closer to the bustling city of Grand Rapids. “Getting to know people from different parts of Michigan has opened my eyes to what we have here,” Jenna told me, beaming. “I could see myself living [in Grand Rapids] for a while.” She graduated in April with a double major in finance and marketing and now has a job at Acrisure, a Grand Rapids–based financial technology and insurance company where she interned during her senior year.
Jenna’s journey helps illuminate a pressing issue in higher education today. Colleges and universities are under enormous pressure, from demographically driven admissions declines to accusations of “wokeness” to mounting public doubts about the value of a four-year degree. Public universities like GVSU took big hits to their budgets after the Great Recession, and while overall per student funding has returned to pre-recession levels in most of the country, debates continue over whether higher education is a sound investment. Many Republican state lawmakers, especially those representing rural areas, argue that public universities contribute to “brain drain,” when students earn college degrees on the taxpayer’s dime and then move out of state to pursue their careers. Those dollars would be better spent, they say, by cutting taxes and subsidizing companies to relocate to their states.
Are they right? The Upjohn Institute, a nonpartisan research organization focused on policy-related issues of employment, set out to answer that question. Using innovative research methods, a group of scholars led by the Upjohn senior economist Brad J. Hershbein found that students at brand-name public flagships—places like the University of Michigan, University of Wisconsin–Madison, University of Kansas, and University of North Carolina at Chapel Hill, to name a few—do tend to leave those states after graduation. But alumni of less-renowned regional public universities, like GVSU, generally stick around, as Jenna Duursma has. And the higher salaries they earn thanks to their degrees provide a significant net plus to the economies of those states and regions.
In the battle for funding, however, regional universities typically lose out. On average, they receive $1,091 (or about 10 percent) less state funding per student than do flagships, according to the Alliance for Research on Regional Colleges, and the funding gap is even worse in Michigan. Regional schools also garner fewer federal research dollars and have smaller endowments. At the same time, regional public universities grant more than 40 percent of all four-year degrees in America, versus 19 percent awarded by public flagships. The average family income of students whose first-choice institution is a regional public school is approximately 24 percent less than for those whose first choice is a public flagship—a factor that helps explain why 60 percent of African American students and 44 percent of Latino students are educated by regional publics. In other words, the universities that disproportionately serve low- and middle-income families produce the most college graduates of any sector, and return the greatest economic benefits for their home states, are the same institutions that have been systemically starved of funding. Nearly every state finds itself in this dilemma. How Michigan has dealt with it provides lessons for the rest of the country.
In 2010, Republican Rick Snyder, a conservative businessman, ran for governor of Michigan promising to end a decade-long decline in state support of higher education. But after winning the election, and with GOP control of the state legislature, he slashed funding a further 15 percent, reducing state support to its lowest level this century. A University of Michigan alum, Snyder claimed that these cuts were necessary to finance a gargantuan $1.6 billion corporate tax cut, which he championed as the policy that will “make us a great state again.”
Cuts to state higher education budgets are typically accompanied by an implicit understanding that universities will react by shifting the cost onto students. Andy Schor, the current mayor of Lansing and former state representative, explained the mind-set some legislators adopt when determining funding priorities: “When you look at higher education, they have the ability to charge tuition. So they have the ability to raise dollars, as opposed to K–12, as opposed to health care.” Left unsaid are the predictably pernicious consequences that accompany higher education’s disinvestment. In the decade following Snyder’s cuts, tuition rose 15 percent faster than inflation at Michigan public universities year over year and student debt increased by more than $7,000. Forty-five thousand fewer people attended college in 2022 than in 2011.
The Upjohn Institute found that students at brand-name public flagships tend to leave the state after graduation. But alumni of less-renowned regional public universities generally stick around. And the higher salaries they earn thanks to their degrees provide a significant net plus to those states’ economies.
Regional universities were hit hardest by the funding cuts. While the University of Michigan could easily recruit more wealthy, foreign, and out-of-state students to mitigate funding shortfalls, regional universities had far less leeway. In-state students predominantly from low- or middle-income families compose most of their student bodies. As the university saw undergraduate enrollment rise 16 percent between 2010 and 2020, enrollment rates fell at 11 of the state’s 12 other four-year public universities. Regional schools like Eastern Michigan University and Central Michigan University were hit particularly hard, losing 31 percent and 39 percent of their enrollments, respectively.
Grand Valley State University was in a particularly challenging spot, largely due to its previous success. When the school was founded in 1963, its first-year class consisted of only 224 students. In a decade that figure grew to 6,000; at the time of the cuts, the student body was north of 24,000 students. But due to Michigan’s anachronistic funding formula, which was developed in the 1970s and only minimally updated, the legislature doesn’t take enrollment growth into account when determining state appropriations. Schools that attract more students each year are punished with less per student funding. The result was that GVSU, already significantly underfunded before Snyder’s 2011 budget, was cut to the bone. Matt McLogan, GVSU’s vice president for university relations, said after the budget was passed, “Grand Valley has essentially been privatized. It’s publicly owned, but is no longer publicly supported in any way that people would recognize.” To stave off more significant tuition hikes after Snyder’s cuts, GVSU was forced to freeze faculty salaries, the president’s included.
I tried to uncover why the state continued to use a funding formula that almost nobody thought was a good idea. Robert Genetski, a former schoolteacher and Michigan state representative, provided one explanation: political clout. Larger universities have more money to employ highly paid lobbyists to influence state appropriations. For example, in 2011—the year that the legislators considered the 2012 budget—the University of Michigan, Michigan State University, and Central Michigan University together outspent every other school combined on lobbying in Lansing. These lobbyists can have quite an impact. Genetski explained to me that while the original higher education budget for the following year, 2013, contained the largest increases in state support for high-performing regional universities like GVSU and Ferris State University, lobbyists for more influential universities successfully killed his budget. Instead, the legislature boosted overall higher education spending by a bit, but with the largest research universities receiving the overwhelming majority of the new money. Over the next few years, Snyder signed additional modest increases in higher education spending, but at levels below what they had been when he was first elected, and with the lion’s share going to the universities with the best political connections, not the highest performance.
In 2018, Democrat Gretchen Whitmer—a veteran of Michigan’s legislature since 2001 and a fierce opponent of Snyder’s cuts—secured a 10-point gubernatorial victory, in part by promising to reinvest in higher education. While encountering constant Republican resistance, she gradually increased state appropriations. When Democrats retook control of the legislature in 2022, Whitmer was able to implement even more expansive reform. In the next year, state appropriations rose to a century high, 48 percent above their low point in 2011. Whitmer also created a generous achievement scholarship, which tripled state financial aid, and she secured free community college for all residents of Michigan. When I spoke with GVSU’s president, Philomena Mantella, about the differences between the legislative climate of today versus a decade ago, she concurred that the tides are changing. Although she pointed out that GVSU continues to operate at a structural disadvantage because of the state’s funding formula, she also agreed that the discourse around higher education had changed. “In 2010, there were lots of questions about college investment as a driver for economic prosperity,” she said. “I don’t hear that anymore.” Directly challenging the conservative consensus, Whitmer bet that investing in higher education would yield greater economic benefits than corporate tax relief.
The new Upjohn Institute paper validates her belief. The conservative charge that states don’t benefit from subsidizing higher education since so many of its graduates end up moving to Brooklyn or San Francisco has been hard to assess because of a lack of reliable data. The Upjohn study addressed this problem by “scraping” publicly available information on the networking platform Linked-In to identify where college graduates end up residing. They then calculated how much state funding each university received, factoring in retention, graduation, and dropout rates for every university. This resulted in a more precise measurement, which correctly gives credit to higher-performing universities. Using that data, the researchers constructed a “social return” metric, consisting of three components: the level of tax revenue spent per student, the graduation rate, and net migration.
The results were unambiguous. On a basis of return on tax dollars, regional universities outperform flagships. For every $100,000 of state funding, the researchers found, regional universities retain nearly two college graduates in the state for every one flagships keep. “From the lens of a state policymaker,” they concluded, “we show that regional public institutions tend to produce the greatest number of graduates who stay and work in-state per dollar of state funding, suggesting investments in these institutions could have particularly high local returns.” (While the best community colleges have similarly high ROI, many others don’t because their students graduate at lower rates and earn less after college.)
In Michigan, the top nine best-performing universities are regional publics, with the two best-known schools, Michigan State and the University of Michigan, ranking 10th and 13th, according to the study’s underlying data, which the researchers shared with the Washington Monthly. Coming in at number one, by a considerable amount, is GVSU, retaining almost five college graduates per $100,000 of state funds—the sixth-highest rate of return of any college in the country. To put that into perspective, consider this: According to a separate Upjohn study, governments must spend nearly $200,000 in corporate tax incentives to create just one job—and not a college-level-salary job, just an average-paying job. That’s a rate of return 10 times worse than what Michigan taxpayers get for their investments in GVSU.
Founded in the 1960s as “the university in a cornfield,” Grand Valley State University—like many regional universities—has chronically struggled to attract the requisite attention and funding from Lansing. Until 2017, GVSU received the least per student funding of any school in the state; today it garners the third least, $2,000 less per student than Michigan’s average public university. Under these conditions, most colleges would likely underperform their peers. And yet GVSU consistently ranks first or second in overall performance, according to state performance criteria that include a host of metrics, including graduation rates, retention rates, students who are eligible for Pell Grants, and degrees awarded in critical fields. GVSU also ranks a respectable 82nd out of 372 on the Washington Monthly’s Best Bang for the Buck list of colleges in the Midwest.
But perhaps most relevant for state legislators is the university’s return on tax dollars investment, which is almost unmatched anywhere in the country. The question is, why?
Governments must spend nearly $200,000 in corporate tax incentives to create just one job—and not a college-level-salary job, just an average-paying job. That’s a rate of return 10 times worse than what Michigan taxpayers get for their investments in Grand Valley State University.
One reason is graduation rates. Colleges with higher grad rates have more alumni earning higher incomes. GVSU graduates nearly 69 percent of its students. That’s better, by far, than any other regional university in the state. Only the University of Michigan and Michigan State have higher graduation rates among publics, but they are more selective than GVSU, which admits 90 percent of its applicants.
Another reason is that colleges located in regions with robust economies have higher returns on state investment because their alumni tend to earn higher incomes. Grand Rapids is something of a boomtown: It has been called “the most successful intensive manufacturing city in America,” and GVSU makes the best of its geographic good fortune. For instance, 75 percent of the university’s students engage in internships, apprenticeships, and other forms of experiential learning. One such experience is the Laker Accelerated Talent Link, a program that Jenna Duursma joined during her senior year, which offers a $15,000 scholarship, a business-related certificate, and a paid internship. “The whole point of the program is to retain talent in the Grand Rapids community,” Duursma explained. “That was kind of the selling point for me because a lot of these companies I’ve grown up hearing about and been interested in my whole life.”
Connecting students with the community also offers GVSU the ability to constantly test and update the curriculum. As students learn what skills and classes were most useful to them, faculty and administrators internalize that feedback to better tailor the university’s offerings. Curriculum adaptation also unfolds on a much larger scale. After a recent study concluded that Grand Rapids needed to increase the local tech talent tenfold, Mantella created the GVSU College of Computing, with a mandate to triple the number of tech graduates the school produces by 2033.
All of this adds up to a college experience that offers students a particularly good opportunity to graduate and start their career nearby. In a 2023 survey of GVSU graduates, 93 percent of respondents were either employed or continuing education. Eighty-six percent of those graduates live and work in Michigan, 76 percent of them in western Michigan, where Grand Rapids is located.
Of course, there is only so much that GVSU can accomplish with such limited funding. Even as the school offers an incredible return on investment for the state, rising tuition and student debt mean the students don’t get as good a deal. GVSU readily acknowledges this reality. When I spoke with Thomas Haas, the president of the university at the time of the 2011 cuts, he explained, “Each year I was president I would go to the state and tell them that if we received funding at the median level for universities in Michigan, I could cut tuition 15 percent. The board fully supported me on that. And the legislature just kind of laughed and said okay but never ended up doing anything about it.”
With more funding, GVSU could not only lower tuition, or at least moderate future increases; it could also produce more of the graduates that Michigan desperately requires. Tech graduates could be tripled sooner than the 2033 target. The university could reinvest in its nursing program—an occupation Michigan is experiencing a dramatic shortage in. The Talent Link, which started with 21 students and Mantella hopes to double each year, could expand by orders of magnitude if the state helped subsidize it: “Suddenly, you’ve got 5,000 students who could be activated. From a state investment perspective, programs that have employers with skin in the game and institutions with skin in the game, that’s a leveraged dollar. To me it’s like, Let’s go.”
Rick Snyder was fond of castigating college graduates who left the state to become “just another yuppie in Chicago.” But it was primarily his decision to decimate regional university funding, which fueled the exodus of fleeing talent. Since Gretchen Whitmer restored funding, GVSU has experienced its first positive enrollment growth in six years. And other schools are beginning to turn things around; Michigan universities statewide saw a 1.8 percent enrollment increase from 2023 to 2024.
Meanwhile, similar battles over higher education funding have only intensified in other states as public confidence in universities, especially among conservative voters, has sharply declined—a function of ideological distrust, anti-elitism, and exorbitant costs all rising in tandem. Legislators assiduously frame cuts as reactions to whichever college bugaboo becomes the latest culture war fodder, so higher education has become the perennial conservative bogeyman. Mississippi, for one, continues to follow the old Snyder playbook. After the State Auditor’s Office released a report detailing high levels of brain drain for college graduates, it proposed getting rid of what the auditor, Shad White, called “useless,” “garbage” liberal arts degrees, which he said serve as “indoctrination factories.” When similar reports of brain drain surfaced in Pennsylvania, conservative legislators quickly proposed creating a constitutional amendment to cap spending and cut taxes to retain talent. Instead, Democratic Governor Josh Shapiro managed to convince the legislature to invest an additional $190.8 million in Pennsylvania’s higher education system, mostly in scholarships to attend regional universities. This decision reverses decades of disinvestment that has left the Keystone State one of the least affordable states to attend college, ranking 49th in the country for state appropriations to higher education per capita.
Now appears an especially promising time to invest in regional universities. When the pandemic laid bare the fragility of global supply chains, policy makers responded with a frenzy of federal legislation supporting infrastructure investment, industrial policy, and reshoring production back into America. Richard Florida, an urbanist who rose to prominence for his 2002 book, The Rise of the Creative Class, told me that more skilled workers will be necessary to make this strategy succeed. While research universities are critical for producing top-end talent, Florida explained, “the knowledge economy requires talent of all stripes. You not only need the kids in Ann Arbor doing all the coding, you also need people in Grand Valley who can make shit work.”
Rick Snyder, former Republican governor of Michigan, was fond of castigating college graduates who left the state to become “just another yuppie in Chicago.” But it was primarily his decision to decimate regional university funding that fueled the exodus of fleeing talent.
Michigan learned this the hard way in 2017, when Amazon announced that it was looking for a city to be the new home of its secondary headquarters. The benefits would be immense: as many as 50,000 new full-time employees earning more than $100,000 a year in wages and benefits on average, generating $5 billion in economic activity. Few states offered incentive packages as generous as the ones Rick Snyder pushed through the legislature to lure the company to Detroit. All told, the 242-page proposal outlined roughly $4 billion in tax breaks. And yet Amazon passed on it. Detroit didn’t even crack the company’s final top 20 list. Why? Amazon’s calculation was incredibly simple: Michigan possessed an insufficient talent pool in the region.
As states scramble to compete for the top jobs and companies, tax incentives will always play some role. But politicians are fooling themselves if they think corporate subsidies can substitute for the steady support of regional universities, which, dollar for dollar, offer the best hope for broad prosperity in the 21st century
and beyond.
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