A few months ago, we were treated to another media blitz over the “largest donation in the University of Michigan’s history,” $110 million from the Charles Munger, vice chairman of Berkshire Hathaway, earmarked for a graduate dormitory. Donations like Munger’s are presented as unqualified wins for the University. By cultivating relationships with successful alumni, the University grows its endowment and receives money for infrastructure projects that, in theory, provide needed educational and residential spaces. But is this the whole story?
In the last decade, the University has transformed itself into an institution that is run for-profit and increasingly tied to Wall Street investment banks, hedge funds and institutional investors. In the turn to profit, the University has decided to pursue wealthy out-of-state students who can pay outrageously high tuition. To do so, it has had to borrow extensively to build new buildings and facilities that would attract such students: As of Dec. 31, 2012, the University had $1.8 billion in outstanding — primarily construction — debt secured by general revenues which include student tuition. This has meant developing relationships with investment banks and institutional investors who buy the University’s construction bonds. These investors, however, will buy bonds only if they are very secure: As a result, the University, like many other universities, has offered up student’s future tuition as collateral for this debt and engaged in aggressive campaigns against unionized and precarious workers’ wages and benefits.
Large donations are a critical part of this strategy of building to attract wealthy consumers. One of the hidden costs of large donations for infrastructure is that they actually force the University deeper into debt. For example, the Munger graduate dorms’ projected price is $185 million. Of the $110 million pledged by Munger, $100 million will go toward construction, so what began as a “donation” has now turned into $85 million of debt for the University. Such donations don’t address the needs of students; rather, they advance the pet projects and educational ideologies of the rich. If this donation is a “gift,” is it most certainly in the form of a Trojan Horse.
Donations are inherently anti-democratic — a stealthy way to avoid any kind of due process or checks on university spending. If the University had decided outright to build a $185-million dormitory, graduate students — and undergraduates too, since their debt is going to pay for $85 million of it — would have had something to say about the project. Instead, because it was a donation there was no public discussion about the project and no debate over its need. Rather, there was only an announcement from above.
Had the administration consulted its graduate students, it might have considered potential gender, sex and trans-gender concerns with such a project. The University and Munger claim that “throwing” students together will result in the “liberation” and “creation” of knowledge — “breaking down the silos” — but it might actually result in unsafe living conditions for many groups, in particular queer-identified individuals, trans-people and women. Moreover, at their estimated current price point — $1,000 per month — the Munger dorms will cost graduate student instructors 77 percent of their yearly income to live there — truly, this is the liberation we have been waiting for.
Given the amount of graduate student ire after the dorm project’s announcement, it’s clear the administration has overstepped on this project. They’ve taken a donation that a rich plutocrat hung in front of their noses and are trapped into building something that even they don’t want. The question is then what to do about it?
The option we propose has two parts. First, we should demand that the University reject all donations that come with strings attached. This means we should demand that the University return Munger’s donation. We must reject all donations that contribute to the financialization of the University through construction bonds and student debt. As such, big spending decisions should be made through a democratic body composed of students — graduate and undergraduate — and workers from all areas of the University and University of Michigan Health System.
However, it seems unlikely that the University will return the Munger donation and even less likely that they will include students and workers in the decision-making process on how funds are allocated. That means that the only way is to oppose the building project through direct action.
If you feel strongly that the University should not be spending $85 million on a dorm that no one wants, if you feel that the University should not be trying to avoid public discussions of how resources are allocated, and if you feel that the University should not let itself become the site of the educational experiments of conservatives and the far-right, we ask you to join us Nov. 1 at 5 p.m. in Canterbury House for an open meeting to discuss what steps we should take next.
Every few months it seems a media blitz announces that there is another “largest donation in the University of Michigan’s history.” These donations are presented as unqualified wins for the university. By cultivating relationships with successful alumni, the university grows its endowment and receives money for infrastructure projects that, in theory, provide needed educational spaces from libraries to labs. But is this the whole story? In the past year, the University of Michigan received the two largest donations in its history from Charles Munger and Stephen M. Ross. In this piece, we will examine the Munger donation and the perils of private “donations” at ostensibly public universities. We do so to illuminate a national trend of donations that come with costly strings attached and because Munger’s “gift” has already generated considerable concern in the University of Michigan community.
Before turning to the dorm project, a little historical background. The University of Michigan has transformed itself in the last decade into an institution that is run for profit and increasingly tied to Wall Street investment banks, hedge funds, and institutional investors. These two changes are related: in the turn to profit, the university has decided to pursue wealthy out-of-state students who can pay outrageously high tuition. To do so, it has had to borrow extensively to build new buildings that would attract such students (as of Dec 31, 2012 the university had 1.8 billion in outstanding, primarily construction, debt secured by general revenues which include student tuition). This has meant developing relationships with investment banks and institutional investors who buy the university’s construction bonds. These investors, however, will buy bonds only if they are very secure: as a result the University of Michigan, like many other universities, has offered up students’ future tuition as collateral for this debt and engaged in aggressive campaigns against unionized and precarious workers’ wages and benefits. 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.
Large donations are a critical part of this strategy of building to attract the wealthy. There is a need to continuously update facilities for such fickle consumers. One of the hidden costs of large donations for infrastructure is that they actually force the university deeper into debt. For example, the Munger graduate dorm’s projected price is $185 million. Of the $110 million pledged by the Vice Chairman of Berkshire Hathaway, $100 million goes towards construction, so what began as a donation has now turned into $85 million of debt for the University of Michigan. In the last decade the university has averaged 523 million a year in building projects (meaning the grand total during Mary Sue Coleman’s tenure has been roughly 5 billion dollars spent on construction). The decision to fund the university using high out-of-state tuition has led, in part, to this strategy of chasing large donations and taking out more debt in order to build facilities where wealthy 1%-er students can see, feel, and imagine themselves as “elite.”
Another hidden cost of large donations is that they always come with strings attached, thereby creating a more unequal university. In contrast to what the university’s press releases suggest, a donation is not a big check that the university gets to decide what to do with. In reality, Munger’s donation will come in the form of stocks, not cash. And this “gift” comes with a lot of stipulations: first, that it be used to build a graduate dorm, and second, that the building’s design match Munger’s specific vision (a very dystopian one, which we will address shortly). Furthermore, these large donations foster inequality internally across the university. Think only of Munger’s prior donation to renovate the law school dorms or Stephen Ross’s recent donation to (only) the athletic department and business school. Why do these donors get to tell the university which schools get the money? Shouldn’t funds donated to the university benefit all areas of learning and all types of students? If these successful businessmen care so much about their alma mater, why should they care where the money goes? Which is exactly the issue. These kinds of gifts are attempts not to benefit the university, but to change it: they aim to destroy what little egalitarianism remains within it, by favoring the pet projects and educational ideologies of the rich. If these are gifts, they are most certainly Trojan horses.
Which brings us to our third point. Donations are inherently anti-democratic, a stealthy way to avoid any kind of due process or checks on university spending. If the university had decided outright to build a $185 million dormitory, graduate students (and undergrads too, since their debt pays for $85 million of it) would have had something to say about it. Instead, because it was a donation there was no public discussion of the project, no debate over its need, but only an announcement. Donations are used to circumvent the contestation of building projects and as such they reinforce the university administration’s dedication to a program of construction not instruction. Just last year, in the wake of Michigan’s anti-public union law, the university waged a scorched earth campaign against graduate students, threatening them at the bargaining table and trying to force them into major concessions on salary and health care. Now they want to give us a wonderful $185 million “present” that we didn’t ask for; a “generous” donation where we can sleep seven to a suite piled on top of each other like prisoners in a dystopian complex where we are envisioned as always working, where there is no separation between our time at work and our time away. If donations serve to remake the public university in the vision of libertarian or conservative “philanthropists,” they serve the university administration by allowing them to take out mass debt without public debate.
The Munger dorms, however, were too dystopian in their vision and too unwanted, and the project has been outright rejected by many graduate students. Munger imagines graduate students living in seven bedroom apartments renting for at least $1000 per person per month. To put this in perspective, the average graduate student makes $1942.13 a month after taxes (in 2013-14) for only 8 months of the year and are left to partial fellowships, department handouts of limited teaching, and/or loans during the summer. That means a typical Graduate Student Instructor (GSI) makes $15,537.04 per calendar year. The Munger dorm (at the advertised price point) will cost $12,000 per year (plus any additional fees or utilities). In other words, the university will be asking graduate students who are employees of the university to spend 77% of their income as teachers to live with very little privacy in a highrise dorm with 6 other graduate students.
Had the administration consulted its highly ranked but underfunded humanities graduate students, it might have considered potential gender, sex, and trans-gender concerns with such a project. The university and Munger claim that “throwing” students together will result in the “liberation” and “creation” of knowledge (“breaking down the silos”), but it might actually result in unsafe living conditions for many groups, in particular queer-identified individuals, trans-people, and women. In addition to not being sensitive to the dangers posed to these groups by such a poorly thought out “liberation,” the administration admits that the dorm targets single graduate students. This shows a lack of commitment to non-traditional graduate students, and in fact makes assumptions about what a “typical grad student” is and wants. Not only is this a dystopian project, it is a heteronormative one as well: a 24-hour knowledge factory meets Barbie and Ken’s Separate Dorm-Room Beds Dreamhouse.
The administration undoubtedly has other visions for the dorm that go beyond the monstrosity itself. The building is part of the new high-class, high-rent model of downtown Ann Arbor that is driving many students away from campus and into the surrounding areas. While Main Street and the vicinity may be chic and appealing to administrators and faculty with three-figure salaries, they are unaffordable for everyone else in the larger Ann Arbor community. In other words, projects like this will contribute to the further segregation, along race and class lines, of not just the University of Michigan, but of Ann Arbor as a whole. At the bottom of this post, you will find a flyer distributed by the Student Union of Michigan (SUM) so you can show your support for saying NO to the Munger dorm and putting an end to this cycle of over construction and debt, so we can take back our university and our city. Hang them on your office door, business, or outside of your apartment that you are taking out loans to pay for because you need to be near to campus.
Clearly, the administration has overstepped on this project. They’ve taken an awful donation that a rich plutocrat hung in front of their noses and are trapped into building something that even they don’t want. It is evident, as well, that graduate students are angry at the lack of democracy in this decision-making process and the administration’s hypocrisy in giving gifts after squeezing graduate students dry in the last negotiation. The question is then what to do about it?
There are a few options that have been floated already but which in their present formulation will unfortunately accomplish very little. The first is to ask the administration to redirect the funds. The money, however, came with strings attached and for a specific project, which means no redirection is possible. The second proposal is to redesign the building. But Vice President of Student Affairs E. Royster Harper has repeatedly stated that the university’s hands are tied (perhaps already by a contractual agreement with Munger) and that they are unable to deviate from Munger’s design without jeopardizing the whole project. Furthermore, even if these two options were possible, they wouldn’t be sufficient, because they would fail to contest the entire model the university is being run on: endless construction, endless student debt, and never an ounce of democracy. Our position as students and workers should be to reject this donation outright, to say NO to Trojan horse gifts that foster inequality and strip public institutions of their right to self-determination.
The option we propose has two-parts. First, we should demand that the university reject all donations that come with strings attached. This means we should demand that the university return Munger’s donation. We must reject all donations that contribute to the financialization of the university through construction bonds and debt. As such, big spending decisions should be made through a democratic body composed of students (graduate and undergraduate) and workers (from all areas of the university). Why? Because as we’ve shown above, donations generate debt, remake the university according to the vision of wealthy donors, and create an unequal university, as they go to departments with the wealthiest alumni (like law and business) and thereby marginalize the rest of the university.
However, it seems unlikely that the university will return the Munger donation and even less likely that they will include students and workers in the decision-making process on how funds are allocated. Which means that the only way is to oppose the building project through direct action. If you feel strongly that the university should not be spending $85 million on a dorm that no one wants, if you feel that the university should not be trying to avoid public discussions of how resources are allocated, and if you feel that the university should not let itself become the site of the dystopian educational experiments of the far-right, we ask you to join us November 1st at 5:00 pm in Canterbury House (721 East Huron) for an open meeting to discuss what steps we should take next.
This piece, written by Dave Wyman, was published in the Michigan Daily on September 25, 2013:
In July, the University placed the Presidential Search Advisory Committee in charge of finding University President Mary Sue Coleman’s replacement. Unlike the committee that nominated Coleman in 2002, which included two students, University staff and non-tenured faculty, this committee includes just administrators and tenured faculty.
While the administration is quick to assure students — and everyone else who has been excluded from the real selection process — of how much they value our input, their words ring hollow when confronted with the fact that 24 of the top 25 universities included students on their most recent search committees. While we applaud the efforts of the Central Student Government to increase the students’ voice in this decision, the student committee that they’ve been granted doesn’t have the power that the committee itself has. It’s no substitute for direct representation.
Everyone but the regents seems to understand this.
If we are truly the Leaders and Best, why can’t we be trusted to be a part of the actual decision, when we hold such a high stake in it? Why have our opinions been relegated to a few forums and easily discountable online surveys?
The strength of our University community is in its diversity. As undergraduate and graduate students, tenured and non-tenured instructors, staff and Ann Arbor residents, we all have interests, hopes and concerns for the new president and the direction of the University in general. We’re all stakeholders in this, and deserve to have our ideas taken as seriously as those of the narrow fraction of the community that makes up the administration and the committee.
Unfortunately, the search’s departure from the more inclusive practices of past searches and peer institutions is in no way exceptional. It’s the culmination of years of administrative expansion.
We find ourselves on a campus where in-state undergraduate tuition has risen 63 percent in the last decade, making the University continually less accessible and forcing many students to take out dauntingly large loans. And, yet, we’re surrounded with new construction geared to boost rankings and draw out-of-state students. We have less say than ever in how the University operates. If we want these things to change — if we want a president who will rethink the model the administration has imposed — we have to take a stand for student rights.
When state funding subsidized the majority of University costs, perhaps it might have been fair for the regents to claim the broad authority they now do over University affairs. But when our tuition money is 62 percent of the budget, it’s unjustifiable for the administration to disenfranchise students in this fashion. Meanwhile, tuition climbs every year with the rationalization of state defunding, construction continues at a fever pitch and the average student graduates with $27,000 in debt.
The time has passed for us to quietly petition the administration for a voice in the direction of the University. The time has passed for us to accept a powerless “assistive” role in vital decisions like the presidential search. We must demand a binding voice in the selection of Michigan’s next president and a deciding role in the way our university is run.
The Student Union of Michigan is resolved to bring real democracy to our campus. The time has come for us to take charge of our own educations. Join us at The Cube at 12 p.m., Thursday, Oct. 3, to call on the administration to include students, faculty and staff as part of the Presidential Search Advisory Committee and let our voice be heard.
In 1996, in-state tuition at UM was $5,710.
In 2012, it is $12,994.
That is an increase of 127%.
This has priced working class, lower income, and minority students out of the university.
The UM administration has taken out more than $2.3 billion in loans since 2007 for the construction of new buildings and luxury boxes at the football stadium.
Students and workers had no say in this matter and UM will now have to pay off these loans with interest for the next 50 years.
Since 2006, university admins have raised tuition 22%.
In the same time period they gave themselves a raise of 27%.
UM is caught in a vicious cycle of raising tuition to build new buildings to attract wealthy students who can afford to pay high tuition which means they must raise tuition to build new buildings to build new buildings to attract wealthy students who can afford to pay high tuition which means they must raise tuition to build new buildings to attract wealthy students who can afford to pay high tuition which means they must raise tuition to build new buildings to attract wealthy students who can afford to pay high tuition which means they must raise tuition…
Hello my name is Ian Matchett, I’m a senior at the University of Michigan, and I’m here representing the newly formed Student Union of Michigan.
First off, we’d like to say that we stand in solidarity with the other student groups that have spoken here. Our struggles are connected and we hope to work with you to make this a more just and equitable campus.
The Student Union of Michigan, SUM, was started this past fall with the intent of organizing the student body in order to strengthen our voice on campus. The past few decades have seen a dramatic shift in public higher education. Once dedicated to educating the people of our state, we have watched as the university began to increasingly resemble a private institution in its behavior, as tuition has skyrocketed, and diversity has plummeted.
I know that you have not been ignorant to this shift, in some ways you and your predecessor’s policies have contributed to it,and in others you have attempted to mitigate some of its negative effects. I am simply trying to show you how we, the students, see it. What it’s like to watch your friends struggling to get good grades taking 18 credits, working 20 hours a week, and still having to take out loans.
-to talk to high school kids who’s futures are limited by the size of their parents paychecks.
-or to graduates still looking for a “real” job after months and years in the workforce.
-and to know that currently we fundamentally have no say in what is happening to us.
SUM is but one of many student power organizations that have emerged across the country in an effort to give us a meaningful voice on our campuses. Our platform is built upon 3 main points: tuition, accessibility and democracy. We believe that tuition must be brought under control. The increasing debt burden on students is unsustainable, and threatens both our futures and the university’s long term viability. We recognize the difficulty of bringing tuition down, but maintain that the university must prioritize ensuring an affordable education for all its applicants.
This connects to our second point, accessibility. Currently only 9% of the university’s student body is Black or Latino. We salute the efforts of CTE to help fight this trend, but tuition equality may not be enough if tuition continues to climb. Similarly today only 20% of the student body comes from families making $50,000/year or less.
Such a trend not only injures those unable to attend the U, but also the quality of the education provided here. Diversity of perspectives and experiences is a key aspect of any learning environment, allowing students to look beyond themselves and connect with people from across the state and the world. We feel that current policy is causing the university to exacerbate racial and class divisions within our society. And this is unacceptable.
At the Core of these goals, is the idea of democracy. We believe that as students of this university, and members of this community- we have a right to a voice in the running of this institution. It is our lives that are affected by university policy, our futures that are threatened by debt, and increasingly it is our money that is funding this university. We deserve a seat at the table. We understand that this is not something that will be changed tomorrow, but we recognize it as the common root of our struggles.
I know that many people would argue that students do have democracy in the form of Central Student Government. And i agree that CSG does a good job of fostering student community and at times raising student concerns with the administration. However, we must not confuse voting with democracy. To vote is simply to choose a representative, a democracy requires that such representatives wield actual power. A truly democratic student body would need to be autonomous from the administration, with actual decision making power in the running of the university. We hope that CSG will one day fulfill that role, but currently there is no such body on campus.
Let me finally say, that we know the issues we have laid out are not just U of M problems, but national ones. And they will require broad solutions. However solutions are also possible locally, and so we have come to ask you, the regents, to help us build a better university. You can start with small steps. For instance, you may notice that my of my fellow students are wearing summer clothes today. We are dressed as we would be if we were here when you decide our tuition bills for the next year. Currently this decision is taken in June, largely excluding students. yet simply by moving it to the middle of the school year you could ensure greater student participation in the decision making process. Several of you have also voiced a commitment to making the U more affordable. We call upon you to honor your statements and campaign promises, and begin the work of first freezing and then lowering tuition.
For too long students have been largely powerless on this campus, and because of this we have borne the brunt of recent austerity measures. We are here to change that.
We thank you for your time and attention, President Coleman.