Study: Economy needs grads

UNM is doomed to constantly raise tuition and student fees in order to survive, according to a global management consulting firm.

A report entitled “Winning by degrees: The strategies of highly productive higher-education institutions,” written by McKinsey & Company, said conventional state universities, such as UNM, are “ripe for disruption.”

“Due to decreasing state support and increasing costs, higher education tuition and fees rose by 439 percent between 1985 and 2005,” the report said. “By comparison, health care costs rose by 251 percent during the same period.”

McKinsey & Company acts as a management adviser to companies and is listed in the top 10 of Fortune magazine’s “World’s Best Companies for Leaders.” The firm suggests the U.S. needs more college graduates. Opinions vary on exactly how many, but the firm estimates that the nation will need an additional 1 million each year by 2020 to sustain its economic health. That would mean increasing today’s annual total—2.5 million—by 40 percent.

As of the fall 2011 semester, full-time tuition at UNM is $2,904 per semester, according to the Office of Institutional Research.

UNM’s tuition has risen by $13.35 per credit hour since spring 2011. OIR records shows tuition has risen by about that amount every semester for a decade. McKinsey & Company found a correlation between degree-completion rates and high tuition: The report said universities like UNM must simultaneously attract additional students, increase the proportion of those students who complete a degree, and keep a tight lid on costs in order to keep tuition from going through the roof.

UNM also has had a flat completion rate of 44 percent for the past 10 years, according to the OIR.

Interim Provost Chaouki Abdallah asked the UNM community to consider McKinsey & Company’s report in an Oct. 9 University-wide email.

“As we start our academic planning discussions this year, it is important to firmly establish the mission of UNM while also focusing on building a sustainable funding model to support our goals,” he said.