Chapter 3: Undergraduate Students – Affordability

24 Chapter 3 Undergraduate Students: Affordability

Goals loans, and work study employment. In acknowledgment of The University of Michigan has a longstanding commitment real concern over the nation’s rising student loan debt, the to provide financial aid to undergraduates that meets the full University has worked hard to provide students with more demonstrated need of admitted, in-state students to pay for and larger grants, which do not need to be repaid, and to tuition, room and board, textbooks and incidentals. Starting reduce their reliance on loans. with the Winter 2018 term, the U-M launched the "Go Blue In 2019-20, 71 percent of in-state and 50 percent of out-of- Guarantee," which pledges the University to provide aid that state students received some type of aid. The average student at a minimum covers four years of tuition for any admitted loan debt for in-state students who graduated in 2019-20 was in-state student whose family income is below $65,000 and $22,462. with assets less than $50,000.

Overview For More Information The University has worked very hard in recent years to minimize tuition increases. It has been able to reduce the net Office of Financial Aid (finaid.umich.edu/) cost of attendance for undergraduate students with financial Go Blue Guarantee (goblueguarantee.umich.edu/) need (despite dramatic declines in state support) by making sizeable and growing investments in financial aid, funded U-M Affordability Guide for In-State Students through a combination of aggressive cost containment and (admissions.umich.edu/costs-aid/michigan-residents/) generous philanthropic contributions. Furthermore, student Cost Cutting and Budget Update support was the highest priority for the recent, record- (publicaffairs.vpcomm.umich.edu/key-issues/cost-cutting- breaking Victors for Michigan fundraising campaign. budget-update/) The University has seen to it that the central financial aid budget has grown to more than keep pace with tuition increases; the budgeted about for student aid has increased 12 percent per year over the last decade. Aid packages combine need- and merit-based grants and scholarships,

Chart updated since the October 2020 edition.

Charts in Chapter 3 3.1 Undergraduate Tuition and Required Fees, per Semester, 2020-21. 3.2.1 Total Cost of Attendance Before Financial Aid, In-State Students, U-M and AAU Public Universities, Adjusted for Inflation, FY2010-2020 3.2.2 Total Cost of Attendance Before Financial Aid, Out-of-State Students, U-M and AAU Public and Private Universities, Adjusted for Inflation, FY2010-2020. 3.3.1 Typical Net Cost of Attendance for New U-M First-Years by Family Income Level, FY2011-2021. 3.3.2 Dollar Change in Average Net Cost of Attendance for New First-Years Receiving Aid, at U-M and Peers, FY2016-2018. 3.4 Total U-M Expenditures for Undergraduate Student Grant and Scholarship Aid, by In-State/Out-of-State Status, Adjusted for Inflation, FY2010-2020. 3.5.1 Average Grant and Scholarship Aid by Source, Adjusted for Inflation, for New First-Years at U-M, FY2009 and FY2019. 3.5.2 Average Institutional Grant or Scholarship Compared to the Average State Grant and Scholarship Aid for New First-Years, U-M and AAU Public Universities, FY2019. 3.6.1 Family Income Distribution for New First-Years and All Undergraduates, by In-State and Out-of-State Status, Fall 2009 & Fall 2019. 3.6.2 Pell Grant Recipients as Percent of Undergraduate Student Body, U-M and AAU Institutions, 2018-19. 3.6.3 Number and Percentage of In-State/Out-of-State U-M Undergraduates Receiving Pell Grants, 2010-2020. 3.6.4 Number and Percentage of Undergraduate Students Receiving Aid, by Type, 2019-20. 3.6.5 Total Financial Aid Awarded and Average Total Award per Student Receiving Aid, 2019-20. 3.7 Weekly Hours of Paid Work by U-M Undergraduate Students, 2009-2019. 3.8 Average Student Loan Debt Burden at Graduation for All, In-State and Out-of-State U-M Undergraduate Students, 2019-20.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 25 Tuition and fees for in-state, first-time, first-year undergraduates start at $7,974 per semester in the College of Literature, Science & the Arts, Penny W. Stamps School of Art & Design, Taubman School of Architecture & Urban Planning, and the School of Nursing. In-state first-years entering the College of Engineering pay the highest per-semester rate of $8,525. 3.1 Undergraduate Tuition and Required Fees, per Semester, 2020-21. Per semester School/College Program In-State Out-of-State

Taubman College of Architecture Lower Division $7,974 $26,133 & Urban Planning Upper Division $8,974 $27,964 Lower Division $7,974 $26,133 Penny W. Stamps School of Art & Design Upper Division $8,974 $27,964 Lower Division $8,451 $26,573 Stephen M. Ross School of Business Upper Division $10,649 $29,730 Lower Division $8,120 $26,286 School of Dentistry (Dental Hygiene) Upper Division $9,127 $28,123

School of Education Upper Division $8,974 $27,964

Lower Division $8,525 $26,286 College of Engineering Upper Division $10,980 $29,492

School of Information Upper Division $8,974 $27,964

Lower Division $8,408 $27,778 School of Kinesiology Upper Division $9,633 $30,334 Lower Division $7,974 $26,133 College of Literature, Science & the Arts Upper Division $8,974 $27,964

Medical School Upper Division $8,974 $27,397

Lower Division $8,288 $26,480 School of Music, Theatre & Dance Upper Division $9,286 $28,309 Lower Division $7,974 $26,133 School of Nursing Upper Division $8,974 $27,964 College of Pharmacy Upper Division $8,974 $27,964

School of Public Health1 Upper Division $8,974 $27,964

Gerald R. Ford School of Public Policy Upper Division $8,974 $27,964

SOURCE: U-M Student Data Sets Tuition and fees contribute to paying for the cost of Part of this year's increase is due to a new fee of $50 per term instruction, financial aid, academic advising, libraries, for COVID-19 expenses. computing centers, and other student support services. Tuition rates vary by school and college in part because the Students who have completed fewer than 55 credits toward program completion pay the Lower Division tuition rates. delivery costs for programs vary or because the demand for Those who have completed 55 credits or more pay Upper certain programs is greater than for others. Division rates. Tuition and required fees increased by 2.5 percent compared to 2019-20 for In-State undergraduate students. Out-of-State undergraduates saw increases of 2.1 percent over last year.

1 The School of Public Health first offered undergraduate programs in September 2018.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 26 Over the last decade, the “sticker price” for in-state U-M students has grown more slowly than the comparable average for in-state students at AAU public universities. 3.2.1 Total Cost of Attendance Before Financial Aid, In-State Students, U-M and AAU Public Universities, Adjusted for Inflation2, FY2010-2020.

+0.98% +1.16%

3.2.2 Total Cost of Attendance Before Financial Aid, Out-of-State Students, U-M and AAU Public and Private Universities, Adjusted for Inflation2, FY2010-2020.

+1.68%

+1.80%

+1.32%

SOURCE (both charts): Integrated Postsecondary Education Data System (IPEDS) The total cost of attendance (excluding financial aid expenses. The net cost of attendance will vary depending on contributions) for incoming first-years is a benchmark figure financial aid provided, as well as the differences in that includes Regentally-approved tuition and required fees transportation requirements and housing choices. and room and board, plus reasonable estimates for the costs The percentage above each double-headed arrow is the of books and supplies, transportation, and miscellaneous compound annual growth rate.

2 Based on 2020 U.S. Consumer Price Index.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 27 Today's typical in-state students with family incomes up to $100,000 pay less to attend U-M than than their counterparts did in 2010-11. 3.3.1 Typical Net Cost of Attendance3 for In-State First-Years by Family Income Level, Before Merit Aid, Adjusted for Inflation4, Academic Year 2011-2021.

SOURCE: U-M Sample Financial Aid Packages, Office of Financial Aid Students from in-state families in the lowest income brackets The dotted line labeled “Sticker Price” is the cost of are not required to pay anything out-of-pocket to attend the attendance before taking into account any grants, loans or University of Michigan. The $2,500 net cost for the under scholarships that may be available to reduce the out-of- $40,000 group represents the amount of Work Study pocket costs. earnings made available to these students, meaning a student who accepts a Work Study job can see a net cost of zero. In Merit-based scholarship aid is not reflected in the cost of attendance data presented here. Merit grants reduce the need addition, Work Study opportunities are offered now to all to take loans or to participate in Work Study as part of a students whose family income is $120,000 or less. student’s Expected Family Contribution.

3 The projected cost of attendance calculation considers Work Study to be a cost to the student, although it can be covered through a Work Study job. The net cost of attendance also accounts for the tax credits typically available to families with annual incomes in the $20,000 to $100,000 range. The net cost does not consider any reduction in loan amounts that were made possible through the award of merit-based scholarships. 4 Inflation adjustment based on Employer Cost Index for 2018.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 28 From FY2016 to FY2018, the average net cost of attendance (or net price) for first-time, full-time undergraduate students who received grants and/or scholarship aid increased about $750 at the U-M, similar to many of its peer universities5. 3.3.2 Dollar Change in Average Net Cost of Attendance for First-Years Receiving Aid, at U-M and Peers5, FY2016-2018.

Private Universities Public Universities

SOURCE: Integrated Postsecondary Education Data System (IPEDS) In FY2018, the average net cost of attendance (full cost minus financial aid) for U-M first-time, full-time in-state undergraduate students who received grant or scholarship aid increased to $16,856, an increase of $749 compared to $16,107 in FY2016. Since the calculation is based only on students receiving aid, a school’s net price rises or falls depending on how its aid budget is spread over qualifying students.

5 A list of the peer public and private institutions, as well as all public and private AAU schools used to compute the averages shown, is published in Appendix A.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 29 In the 2019-20 academic year, the U-M provided $282.5 million in grants and scholarships from university funds to undergraduate students. 3.4 Total U-M Expenditures for Undergraduate Student Grant and Scholarship Aid, by In-State/Out-of- State Status, Adjusted for Inflation6, with Annual Percentage Increases, FY2010-2020.

SOURCE: U-M Financial Aid Data This chart shows the amount of financial aid paid to undergraduates from institutional funds as both need-based grants and merit-based scholarships. The value above each column is the percentage increase in expenditures for grant and scholarship aid from the previous year.

Fundraising provides an important component of the institution’s financial aid resources, and about 20 percent of the U-M endowment is now dedicated to financial aid.

6 Inflation based on 2020 U.S. Consumer Price Index.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 30 Between FY2009 and FY2019, U-M increased the inflation-adjusted, average U-M grant and scholarship aid to new undergraduate students by $6,693. At the same time, when adjusted for inflation, the average grant and scholarship aid from the federal government decreased by $438 and the average state grant and scholarship aid decreased by $509. 3.5.1 Average Grant/Scholarship Aid by Funding Source, Adjusted for Inflation7, for Undergraduate First-Years at U-M, FY2009 and FY2019.

SOURCE: Integrated Postsecondary Education Data System (IPEDS) On average, the inflation-adjusted, grant and scholarship aid from the U-M to a first-time full-time undergraduate student was 61 percent higher in FY2019 than in FY2009. Conversely, when adjusted for inflation, the average grant and scholarship aid from the State of Michigan is 34 percent smaller now compared to a decade ago, and federal grant and scholarship aid, adjusted for inflation, is 7 percent smaller.

7 Based on 2019 U.S. Consumer Price Index.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 31 The University of Michigan provides the second-highest average institutional grant/scholarship aid of all AAU public institutions. However, average state grant/scholarship aid to U-M students is lowest of all AAU public universities. 3.5.2 Average Institutional Grant or Scholarship Compared to the Average State Grant and Scholarship Aid8 for First-Year Undergradutes, U-M and AAU Public Universities, FY2019.

U MICHIGAN

U MICHIGAN

SOURCE: Integrated Postsecondary Education Data System (IPEDS) Only one AAU public university – University of Virginia, at $20,701 per student – provides larger average institutional grant and scholarship aid to first-time first-year undergraduate students. U-M's average institutional grant/scholarship aid to first-years is $17,962.

The average State of Michigan grant/scholarship to U-M students is smaller than the comparable average state aid provided to any other AAU public university.

8 The average aid calculation is based only on students who receive such aid.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 32 The percentage of in-state irst-years and of all undergraduate students from families with an annual income of $50,000 or less is larger now than a decade ago. 3.6.1 Family Income Distribution for First-Year and All Undergraduate Students, by In-State and Out-of-State Status, Fall 2009 & Fall 2019.

SOURCE: U.S. Department of Education Family income is based on data reported by families on the Free Application for Federal Student Aid (FAFSA), an online form that college students must complete to be considered for financial aid.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 33 The U-M enrolls a lower percentage of students eligible for Pell Grants compared to most other AAU public universities, and similar to the levels at most private AAU universities. 3.6.2 Pell Grant Recipients as Percent of Undergraduate Student Body, U-M and AAU Institutions, 2018-19. Percent of undergrads Percent of undergrads

with Pell grants with Pell grants AAU Privates (average) 16% New York University 19% AAU Publics (average, excluding U-M) 24% Princeton University 19% University of Maryland 18% University of California-Irvine 40% University of Minnesota 18% University of California-Davis 37% Massachusetts Institute of Technology 18% University of California-San Diego 37% Northwestern University 18% University of California-Santa Barbara 36% University of Rochester 18% Stony Brook University (SUNY) 35% Yale University 18% University of California-Santa Cruz 35% Brandeis University 17% University at Buffalo (SUNY) 33% Cornell University 17% University of California-Los Angeles 32% Dartmouth University 17% Rutgers University 29% Stanford University 17% University of Arizona 29% UNIVERSITY OF MICHIGAN 16% University of California-Berkeley 27% Purdue University 16% University of Florida 26% University of Colorado 16% University of Oregon 26% Boston University 16% University of Utah 26% Vanderbilt University 16% Columbia University 25% University of Pittsburgh 15% Pennsylvania State University 23% Rice University 15% University of Texas at Austin 23% Georgia Institute of Technology 14% University of Illinois 23% University of Wisconsin 14% University of North Carolina 23% California Institute of Technology 14% Michigan State University 22% Carnegie Mellon University 14% Texas A & M University 22% Duke University 14% Iowa State University 21% Johns Hopkins University 14% Ohio State University 21% University of Virginia 13% University of Kansas 21% Brown University 13% University of Missouri 21% Case Western Reserve University 13% University of Washington 21% University of Pennsylvania 13% University of Southern California 21% Washington University 13% University of Iowa 20% Harvard University 12% Indiana University 19% Tulane University of Louisiana 11% Emory University 19% University of Chicago 11% SOURCE: Integrated Postsecondary Education Data System (IPEDS) The Federal Pell Grant Program provides need-based grants Data for public universities are shaded in yellow; private to low-income undergraduate students to promote access to a university data are shaded in blue. college education. Pell Grants, unlike loans, do not need to be repaid. The maximum Pell Grant for the 2018-19 academic year was $6,095, which then may be adjusted for each recipient according to financial need, cost to attend school, and status as a full-time/part-time and full-year/part- year student.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 34 Many more U-M undergraduate students receive Pell grants now compared to a decade ago. The percentage of the undergraduate population supported by a Pell Grant has also increased compared to 2010. 3.6.3 Number and Percentage of In-State/Out-of-State U-M Undergraduate Students Receiving Pell Grants, 2010-2020.

SOURCE: U-M Office of Financial Aid Pell grants are need-based awards made to students based on the student's family income, as reported on the Free

Application for Federal Student Aid (FAFSA), an online form that college students must complete to be considered for financial aid. The percentage is based on the number of students who received a Pell Grant during the academic year divided by total fall undergraduate enrollment.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 35 Seventy-one percent of in-state undergraduate students receive some kind of financial aid, and 46 percent of in-state undergraduates receive need-based grants. 3.6.4 Number and Percentage of Undergraduate Students Receiving Aid, by Type, 2019-20.

In-State8 Out-of-State8 Aid Type (16,653)9 (14,613)9

Need-based Grant Aid 7,630 (46%) 4,029 (28%)

Merit-based Scholarship Aid 8,975 (54%) 4,352 (30%)

Work Study 2,008 (12%) 1,022 (7%)

Loans 5,637 (34%) 3,892 (27%)

Any Type of Aid 11,875 (71%) 7,330 (50%)

3.6.5 Total Financial Aid Awarded and Average Total Award per Student Receiving Aid, 2019-20.

Aid Awarded In-State8 Out-of-State8

Total Aid Awarded from all Sources $222,622,118 $270,435,736

Average Total Award per Student $18,747 $36,894 Receiving Any Type of Aid

Source: U-M Office of Financial Aid In reviewing these charts, please note: a) many students receive multiple types of aid, b) many merit-based scholarships also have a need-based component in their criteria, c) the loan data includes all student loans, whether included in a student’s financial aid package or as a supplemental loan.

8 Tuition residency status 9 Fall 2019 enrollment

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 36 Just over half of U-M undergraduate students work for pay while in school; of those who do, most work 10 hours a week or less during the academic year. 3.7 Weekly Hours of Paid Work by U-M Undergraduate Students10, 2009-2019.

SOURCE: University of Michigan Asks You (UMAY) undergraduate survey According to student reports, the time devoted to work for pay has has been fairly consisten over the last decaade. While some U-M students help finance their education through work for pay during the academic year, it’s important that this not impede students’ progress toward completion of their degree programs.

10 Percentage distributions exclude students who did not respond.

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 37 More than half of in-state undergraduate students in the 2020 graduating class completed their degrees without incurring student loan debt. 3.8 Average Student Loan Debt Burden at Graduation for All, In-State and Out-of-State U-M Undergraduate Students, 2019-20.

2019-20 Graduating In-State11 Out-of-State11

Class (7,624)12 (4,059)12 (3,565)12

Average Loan Burden $25,753 $22,462 $31,251

Number of Graduates with Loans 2,804 1,754 1,050

37% 43% 29% Percent of Graduates with Loans of all of in-state of out-of-state undergraduates graduates graduates

SOURCE: U-M Financial Aid Data Thirty-seven percent of the 2019-20 undergraduate class In interpreting loan burden figures, it is important to graduated with debt. The average loan burden for in-state distinguish between “packaged” loans and “supplemental” student graduates was $22,462 and for out-of-state students loans. Students who apply for financial aid at U-M are was $31,251. Compared to the previous year’s graduating automatically considered for low-interest federal loans, class, the average debt burden at graduation increased by which are awarded as part of financial aid packages. $456 for in-state students and decreased by $1,249 for out- Supplemental loans, which are offered both by the federal of-state students. The percentage of students, overall and by government and private lenders, are available to all students, in-state or out-of-state status, remained the same as last year. regardless of whether they are eligible for financial aid.

11 Tuition residency status 12 Counts from 2019-20 graduating class

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 38

Chapter 3 – Undergraduate Students: Affordability (17th Edition) 39