Hear associate editor Lauren Anderson discuss her story on the BizTimes MKE Podcast. Listen here.
In fall 2019, University of Wisconsin-Milwaukee leaders celebrated the conclusion of its $251 million campaign, the culmination of a seven-year-long fundraising effort.
The appeal generated large gifts from some of the region’s most prominent business leaders, including Marianne and Sheldon Lubar with their $10 million donation to establish a new entrepreneurship hub, a $5 million contribution from Mary and Ted Kellner to support faculty and scholarships, and millions from Rockwell Automation and Microsoft Corp. to support the new Connected Systems Institute.
Sheldon Lubar, the founder of Milwaukee-based private investment firm Lubar & Co., made a strong case for investing in the university while garnering support for the campaign in 2018: “I believe there is no more important institution in Milwaukee and the state than UWM.”
But just six months after confetti rained on UWM’s Panther Arena in celebration of the quarter-billion-dollar fundraise, campus leaders were forced to move classes online, send students home and shut down in-person activities in response to the threat of COVID-19. Revenues took a roughly $9 million hit during the upended spring 2020 semester – pandemic-related losses eventually swelled to nearly $92 million, offset partially by federal relief aid.
UWM welcomed students back on campus with masking and mitigation procedures in fall 2020, but the headwinds pummeling the larger higher education sector over the past 18 months have laid bare the unique challenges facing Wisconsin’s second-largest university.
The school’s comprehensive campaign advanced major initiatives and improvements to campus, but for a university that straddles what many consider to be two important yet resource-heavy ambitions – to produce top-tier research and provide broad higher education access to the region’s under-served students – structural financial challenges threaten its ability to sustain both of them.
A report published this summer by the Wisconsin Policy Forum drew attention to the confluence of factors that has reshaped UWM’s financial outlook, including declining enrollment, lagging state support and an eight-year tuition freeze.
Compared to its public urban university peers nationally, the report found, almost none face “such stiff challenges.”
COVID has exacerbated existing issues, but university leaders had already been sounding the alarm for years prior to the pandemic.
[caption id="attachment_515597" align="alignright" width="300"]
Mark Mone[/caption]
“On the one hand, we matter,” UWM chancellor Mark Mone said of the report. “We’re doing significant, incredible things. If you just stand back and look at the data: the number of students, 200,000 alumni, and how many of our students go into high-demand, high-growth areas in the state of Wisconsin. So, we matter. But we’re in peril.”
Dual missions
UWM has faced a tall order from the start. The university traces its origins back to the Normal School of the late 1880s but took its current form officially in 1956 following a political debate over the need for a major university in the state’s economic center. If the city was going to be great, supporters reasoned, it would need a great public university.
The access-versus-research debate came into focus in the 1990s. The contraction of the region’s manufacturing sector gave rise to existential questions: Should the university focus on promoting economic development through research or on educating disadvantaged and underemployed residents to help them engage in a changing economy?
Leaders chose both, doubling down on the university’s double mission.
Of all UW System schools, UWM today serves the largest number of Black, Latino and Southeast Asian students, which together make up a quarter of its student body. More than a third of its enrolled students are the first generation in their family to go to college. A response to significant disparities among white, Black and Hispanic students’ graduation rates, UWM made a public pledge last year to eliminate those equity gaps by 2030.
Meanwhile, a concerted push to bulk up its research efforts – spearheaded under former chancellor Carlos Santiago in the mid-2000s – culminated in UWM becoming a “R1” research institution in 2016. Previously, UW-Madison was the only institution in the state to hold that status, the highest given by the Carnegie Classification of Institutions of Higher Education.
Some UWM supporters dismiss the access-research dichotomy altogether, arguing the region needs both.
“People that are setting up that strawman are dead wrong,” said John Torinus, chairman of West Bend-based Serigraph and a UWM Research Foundation board member.
But research and educational equity require significant investment, and they are now at risk due to underfunding.
[caption id="attachment_535009" align="alignnone" width="1280"]
Panther statue on UWM’s campus.
Jake Hill Photography[/caption]
State support
Supporters have long argued UWM is gravely underfunded.
Stacked up against its peers nationally, UWM’s state tax funding is relatively low. Among 14 similar urban research universities nationally, its per-student state funding in 2019 was the third lowest, according to the WPF report. When its state funding is combined with tuition and fee revenue, UWM received the second lowest among its peers. While state per-student appropriations to UWM have grown in recent years, that is partly due to its drop in enrollment, WPF said.
Comparisons within Wisconsin are often drawn between UWM and the state’s flagship school. UWM receives $5,351 per student from the state, compared to UW-Madison’s $9,108, according to the Center for Research on the Wisconsin Economy.
Asked about that disparity during a recent WisPolitics interview, UW System president Tommy Thompson said the funding allocations reflect the higher expenses associated with running the Madison campus, which includes a medical school and hospital system. UWM’s 2020-’21 budget was $677 million for its roughly 24,000-student campus, compared to UW-Madison’s $3.4 billion for its 45,500 students.
Changing the formula that determines how money is divided among UW schools would first depend on the Republican-controlled Legislature releasing more funds to the UW System, Thompson told WisPolitics. Several Republican state lawmakers declined requests for comment about the funding formula.
[caption id="attachment_535011" align="alignnone" width="1280"]
Lubar Hall on Maryland Avenue.
Jake Hill Photography[/caption]
“You cannot change the reimbursement to campuses when there’s no extra money,” Thompson said. “… If the Legislature gives extra money, then I think we should take a look at the distribution percentages and how we could do it to be more equitable. I would love to do that. But you can’t take away from Madison and give to Milwaukee, just because they’re different. They have a different responsibility; they’re different schools.”
Though growing, UWM’s $113 million endowment is also dwarfed by Madison’s $3.2 billion fund, a product of UWM’s relative youth and size. Among 11 comparable public research institutions examined in the WPF report, UWM’s endowment was more in line with its peers though still the second smallest of the group.
“It takes so long to build up a larger base of that external funding. We just haven’t been around long to enough to build up the sort of base that a flagship institution can do,” said Robin Van Harpen, vice chancellor of finance and administrative affairs at UWM.
It’s often argued that Milwaukee and Madison are fundamentally different – two schools with two distinct missions. But the perpetuation of long-held perceptions of prestige, which some say are reinforced by a state funding formula that prioritizes the flagship campus, means UWM is often relegated to second place in the public eye, supporters say. UW-Madison is the 14th highest ranked public university in the U.S. News & World Report annual college rankings. UW-Milwaukee doesn’t appear in the rankings.
[caption id="attachment_535008" align="alignright" width="300"]
Ricardo Diaz[/caption]
“UWM becomes a stepchild, it becomes an afterthought, it becomes a backup school” in people’s minds, former United Community Center executive director Ricardo Diaz said, noting that’s not the case with Michigan’s two primary public universities, the University of Michigan and Michigan State University.
Enrollment trends
Many universities across the Upper Midwest and Wisconsin have experienced drops in enrollment in recent years, a reflection of declining birthrates and fewer students completing high school overall.
Higher ed institutions were already bracing themselves for a demographic cliff in 2025, when they are projected to see a downturn in the college-going population – a trend that traces back to Great Recession-era birth trends. But colleges are now facing that drop-off five years sooner than expected due to the pandemic.
UWM’s losses prior to the pandemic were worse than others in the state and most of their national peers, WPF said.
Enrollment at the main campus has fallen 21% since its peak of 25,035 full-time equivalent students in 2010 to 19,711 in fall 2020. The decrease has nearly offset the rapid growth UWM saw in the decade prior. UWM’s fall 2021 semester enrollment numbers haven’t yet been certified.
The enrollment decline – paired with a tuition freeze that’s been in place since 2013 – has caused UWM’s tuition balances to decrease nearly by half, from $57 million to $29 million, over six years, according to WPF.
“This drop (in enrollment) has sapped UWM of a critical stream of revenues during an already difficult time, compounding the painful effects of stagnant state funding and the tuition freeze,” the policy forum said in its report.
Tuition-setting power is now held by the UW System Board of Regents, which has not yet indicated it plans to lift prices.
The WPF report points to the decrease in students completing high school in the greater Milwaukee area over the past decade as one explanation for UWM’s declining enrollment. Students completing public high school in the five-county greater Milwaukee area dropped by just over 2,000 students between 2012 and 2020.
Meanwhile, at a time when attitudes around higher education are shifting, universities like UWM are increasingly being forced to answer the question: What’s the value of a four-year degree?
“We have to do a better job showcasing exactly what UWM does, in terms of the opportunities our students have and job offers and the average starting salary and occupational demand. That’s on us,” said Mone.
Bucking trends within the UW System, UW-Madison has seen a 10% enrollment increase over the past decade. WPF’s report argues the flagship university’s prestige may have insulated it from some industry headwinds.
With a smaller college-bound pool to draw from, Van Harpen, said campuses like UWM don’t have as many options to draw in more students.
“We don’t have that lever of choosing to admit more or fewer in order to maintain enrollment. We don’t have that because our doors are pretty wide open, which is why over several decades prior to the last decade, we grew exponentially,” she said. “We were serving more students because our mission is access. Now, with the decline in overall population, it’s not surprising to see access institutions lose market share, because other institutions that are more selective are opening the doors wider, choosing to admit more students.”
While the number of white students across UWM’s three campuses has fallen nearly 7,100 (30%) over the past decade, enrollments of students of color have increased by 1,179. That trend has been driven largely by Latino students and those reporting two or more races, both having increased by 70% since 2021. The number of Black students fell 570 students over those years.
Diaz noted that the majority of students coming out of the Milwaukee-based United Community Center who continue on to post-secondary education attend UWM, and the university has bolstered its support in recent years to help Latino students attain their degree.
“If the growth in the Milwaukee Latino community were not as prevalent as it is today, UWM’s enrollment would be much lower,” he said. Diaz has supported UWM’s efforts to gain federal Hispanic-serving institution status.
Milwaukee Public Schools, meanwhile, has seen a decrease in students going on to attend UWM in recent years, waning from 301 students in 2013 to 232 in 2019, with a steep drop-off to 145 students in 2020.
While the pandemic and overall MPS enrollment rates have contributed to that trend, district leaders said students are also increasingly looking outside the state as MPS has bolstered its relationship to Historically Black Colleges and Universities.
More students have also been attracted to Milwaukee Area Technical College since the launch of its free-tuition Promise program five years ago.
Promise programs – “last-dollar” programs that make up the difference for low-income students’ tuition after federal and state aid is applied – are being offered by a growing number of Wisconsin schools, including many tech colleges and some four-year schools, including UW-Parkside and UW-Madison.
[caption id="attachment_535012" align="alignnone" width="1280"]
The fountain on the UWM campus.
Jake Hill Photography[/caption]
Mone said bringing a Promise program to UWM was his “top request” for the current state budget, but it wasn’t ultimately included.
“If we had received that, if that were built into the budget, that would be the biggest game changer that could happen to not just UWM but other campuses that have a large number of under-represented students,” he said.
Without state assistance, a free-tuition program for low-income students at UWM would require a significant amount of philanthropic funding, Van Harpen said. A third of UWM’s students are eligible for Pell Grants, federal need-based aid tied to a students’ household income. By comparison, 12% of UW-Madison students are Pell eligible.
“We have been driving more money into need-based scholarships, but we just haven’t gotten all the way to offering a Promise program,” Van Harpen said. “We’re getting closer, and every year we divert more money. … At the scale we’re at, it’s a large dollar amount to make up a complete Promise program like at Madison. But we’re still working towards it.”
Playing to its strengths
Milwaukee leaders say there are opportunities for UWM to lean into what makes it distinct.
[caption id="attachment_535007" align="alignright" width="300"]
Gale Klappa[/caption]
Gale Klappa, chairman of Milwaukee-based WEC Energy Group and a co-chair of UWM’s past two comprehensive campaigns, said the university is particularly effective at industry partnerships.
His own company, which owns We Energies and Wisconsin Public Services, works with UWM’s meteorology department to help its teams forecast weather events and know where to place crews ahead of a storm.
“Knowing more precisely when those storms are going to hit can not only save restoration time but save the company millions of dollars in terms of timing in which we stage our crews and organize our restoration efforts,” Klappa said. “We have historically subscribed to UWM’s private weather service, and … because of the greater understanding, the local understanding – particularly of the impact of the lake – on the timing of storms, we found that UWM’s meteorology and more precise forecast are really the best we can get.”
UWM has struck several new noteworthy partnerships with area companies in recent years to grow the region’s talent.
It’s teamed up with Marquette University and Northwestern Mutual on a data science institute that has students working on real-world problems using insights from data, with the goal of producing more Milwaukee tech talent. Its Connected Systems Institute – a collaboration with industry partners including Rockwell Automation, Microsoft Corp., WEC Energy Group, A.O. Smith and others – is designed to help manufacturers take advantage of Industrial Internet of Things technology.
Torinus said UWM has positioned itself as a hub for entrepreneurial activity, saying it’s become a central part of the university’s strategy over the past 20 years. Within that time, the number of patents coming out of the university has grown from one to 121, and it’s spun out 15 companies.
“We’re just getting started,” Torinus said. “It’s a good start but a relatively new start.”
UWM is also unique in the sheer number of graduates it produces – roughly 5,300 annually – about 75% of whom stay in the Milwaukee region.
“From Manpower to Northwestern Mutual to Rockwell to you name it – there’s a very, very strong presence of UWM grads in all of our companies,” Klappa of WEC Energy said.
The university’s position as an access institution is part of the answer to region-wide workforce equity goals, Milwaukee leaders say. The Metropolitan Milwaukee Association of Commerce’s Region of Choice initiative, for example, aims to address Milwaukee’s massive gaps in African American prosperity and Hispanic prosperity.
“Here’s an institution that really does matter,” Mone said of UWM. “It’s at a scale and a level of impact and quality that really provides diverse talent that you don’t get at a lot of other institutions in the state of Wisconsin. When we talk about MMAC’s Region of Choice, where is that diverse talent going to come from? How are organizations going to achieve 25% delta in Black and brown populations in their leadership? Where are they going to get 15% more of a diverse workforce?”
Research status
Today, UWM and UW-Madison are among 130 research institutions nationally – and the only two in the state – to hold the “R1” status.
Leaders say UWM’s research status benefits area companies.
“Whether it’s GE, Johnson Controls, Clarios, or others that really focus on energy, batteries or the types of things we’re doing with smart manufacturing, with Connected Systems, these things help companies in their global competitiveness,” Mone said. “That’s the value of the research university at scale.”
But after years of declining research spending, UWM’s status is now at risk.
R&D spending at UWM has fallen over the past decade, from $61.2 million to $53.8 million from 2011 to 2019. The peak was in 2010, when the university had 834 faculty numbers. Today it has about 720.
Fewer faculty means fewer people competing for outside funding, and in recent years, the university has lost some key professors – either to retirement or other universities – who drew in external research funding, the WPF report noted.
UWM trails most of its peers in faculty compensation; its average salary for faculty of all ranks was second lowest of 15 similar universities studied by WPF.
“We have been poached dramatically,” Mone said. “It’s significant.”
Despite its fiscal challenges, Mone said he refuses to choose between UWM’s missions. He’s heard the debate over which should be prioritized for years but says leaders are committed to both access and research.
“As chancellor, I will never let either of those go,” he said. “Now, the bigger, more practical issue is can we maintain that level (of funding)?”
Klappa argues the increased clarity around UWM’s mission in recent years is itself a sign of progress. Part of the path to greater financial sustainability is owning what the university is – and what it isn’t.
“In many ways, as the Milwaukee region goes, so goes Wisconsin,” Klappa said. “The challenges are clear, but I think the will is there. And over time, as UWM has refined its mission and been very clear about it, I think there will be success going forward. There has to be. I can’t see a thriving Milwaukee region without a thriving UWM.” n
