Traditional funding sources for public universities began declining with the national recession in the 1980s.  Since then, government budgets have steadily tightened, and funding for research and financial aid has came under increasing scrutiny, as legislators search for savings in an ever smaller collection of programs.  Yet, while funding fell, the costs of higher education, of sustaining high quality teaching and research programs, were actually increasing.

The University of Michigan found itself in a Òcatch-22Ó situation.  Success in a rapidly evolving society demanded quick and creative responses to opportunity.  But bold action was not free.  How, we asked, could we respond to change while still preserving and enriching our core mission of teaching and learning?

Caught between declining funding, spiraling costs, and competing priorities, we realized that only a stable financial foundation, less susceptible to the winds of government fortune, would sustain our position as Òthe leaders and bestÓ into the next century.  After countless meetings with groups and individuals across the campus and beyond, we created an ambitious three-pronged fiscal plan.  We stressed cost containment, prudent resource management, and an aggressive development of alternate revenue sources like the Campaign for Michigan.

A decade of hard work has paid off.  Even Wall Street has lauded our effort, granting the University an Aa1 ratingÑthe highest ever achieved by a public university.