On April 1, 2014, the University of Michigan announced on The University Record that its Chief Financial Officer Tim Slottow would become the new president of the for-profit University of Phoenix. It sounded so ridiculous that even Michael Proppe, the president of the Central Student Government (CSG) and someone who we don’t usually see eye to eye with, was convinced it was an April fools joke. What could the CFO of a public university like the University of Michigan possibly know about running a for-profit private university like the University of Phoenix? Wouldn’t it be hard for him to adjust to the logic of a for-profit (recently probed by the Senate) after spending 12 years working at an ostensibly public institution? If Slottow’s tenure at the University of Michigan is any indication, the answer is a resounding “No.”
The institution whose finances Tim Slottow was charged with managing is no longer public in any meaningful sense of the word. During Slottow’s tenure as CFO at the University of Michigan from 2002 to 2014, one year of lower division undergraduate in-state tuition more than doubled, increasing from $6,395 to $12,948. If tuition had kept pace with inflation it would be about $8,346. Furthermore, the University has radically reshaped the student body, privileging wealthier students whose families can afford exorbitant out-of-state tuition while pricing out students from lower class backgrounds and Black, Latin@, and Native American students. There’s now more students at U-M whose parents make over $200,000 that there are students whose parents make less than $75,000.* Rich students want fancy facilities, so the university has dedicated hundreds of millions of dollars to expensive, unnecessary construction projects. The University now brings in over $1 billion in revenue each year from students’ tuition (just under half of which are paid for with loans).
Slottow’s management of the University’s finances, however, must have been even more attractive to the University of Phoenix’s board of trustees. His accomplishments are duly noted in the University’s press release:
Among his many accomplishments are a U-M endowment that now stands at $8.4 billion and the highest possible bond ratings from both Standard & Poor’s (AAA) and Moody’s Investor Services (Aaa). His leadership has shaped many initiatives to enhance the student and employee experience including the physical transformation of campus with new and renovated facilities.
We’ve previously discussed the way that the University leverages its excellent credit rating on the backs of its students. By pledging student tuition as collateral for its construction bonds, the University is able to secure extremely favorable interest rates for itself. The flip side, however, is that students are forced to take on increasing debt loads at higher interest rates to be able to study here. Furthermore, to maintain such a stellar bond rating, Slottow has tied the university increasingly to the whims of Wall Street investors:
Investors see the university’s commitment to raising tuition and attacking labor as an assurance that profits will flow uninterrupted through the university to them, and they demand these conditions in order to buy the university’s debt. In short, the university administration, in order to sell bonds needed to build buildings for wealthy students, has committed itself to continuously raising tuition and impoverishing its labor force, which has the effect of forcing more and more students deeper and deeper into debt and more workers (from GSIs to lecturers to CNAs in the healthcare system) into increasingly risky, marginal lives.
As for the endowment, students and workers will see barely any of that $8.4 billion pool Slottow and the rest of the administration are so proud of. With their tuition, students contribute about four times as much as the endowment does each year to the University’s operations. Meanwhile, that money is being funneled to some of the most noxious corporations in the world, including those that make their profits from fossil fuels and the occupation of Palestine. Under Slottow, U-M has doubled down on its connections to Wall Street and for all intents and purposes become a hedge fund.
The University of Michigan is no exception here—“public” universities all over the country are being increasingly structured to mimic for-profits. It is no surprise, then, that the CFO of a “public” university would have just the skills of profit maximization that a for-profit seeks. Tim Slottow is no stranger to increasing profit at the cost of providing a good, affordable education. For this reason, he is a great choice for the next president of the University of Phoenix, and we are confident that he will do a great job increasing the bottom line there.
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* For U-M tuition history, see this document [pdf]. For the changing class and racial composition of the student body, see this ten year comparison [pdf]. Between 2000 and 2010, the percentage of U-M students whose family income was less than $75,000 declined by 5.8 percent (to 26.5 percent of the total student body), while the percentage of students whose family income was $200,000 or more increased by 9.2 percent (to 27.6 percent of the total student body). These trends are only increasing, as the University administration acknowledges (at least to itself). The following slides come from a Powerpoint presentation on “Climate and Diversity Issues on Campus” in Winter 2014.