Mandates & Costs - US Merchant Marine Academy & State Maritime Academies

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1 Mandates & Costs - US Merchant Marine Academy & State Maritime Academies Prepared for Senator Mark Begich by US Merchant Marine Academy Alumni Association & Foundation January 17, 2014

2 Fundamental Question Should the Federal Government close the U.S. Merchant Marine Academy (USMMA) in favor of additional scholarships to the State Maritime Academies (SMAs)? No, doing so would cause irreparable damage to national security and cripple the U.S. Maritime Industry The U.S. Maritime Industry has greater annual demand than the combined output of both USMMA and the SMAs currently meet The Federal Government has little control over the six SMAs California, Maine, Massachusetts, Great Lakes, New York, & Texas The relationship between USMMA and the SMAs complement each other, rather than compete with each other USMMA is designed and mandated to meet defense strategic sealift needs and military needs of the United States. The SMAs are not designed nor mandated to meet this need. Closing USMMA would cede the Federal Government's responsibility to set the standards in maritime training and education to non-federal institutions over which the Federal government has no control While the AAF is eager to discuss each of these bullets, given the time available, we 2 want to focus on misconceptions about CPG

3 Cost Per Graduate MARAD is currently undertaking a Cost Benefit Analysis, comparing USMMA to the six different SMAs in response to the Senator s question Cost is just one of many factors to consider when determining the value of USMMA as a Federal Service Academy but one that typically gets most of the attention in early stages of conversation Assuming Cost Per Graduate (CPG) becomes a predominate figure in this study, it will be very important to understand the assumptions driving this mathematical equation The actual value of the CPG figure provided by MARAD with be insightful, but only in so far as decision makers understand how the value was derived in order to determine the relative value of USMMA to the six SMAs CPG calculations frequently result in wild variations depending on underlying assumptions

4 Cost Per Graduate In its simplest form, CPG can be defined as Education and Training Investment Number of Graduates For USMMA this equation is reasonably simple MARAD has a well defined budget line for USMMA (FY14 anticipated OpEx = $60.1M) All USMMA graduates are required by law to meet the same technical standard Target graduation rate is 226 graduates (upon completion of barracks renovation) Defining CPG for the six different SMAs is much harder Each State school operates under a different state college system with varying degrees of support from Federal, State, and University Systems under which they operate, and each also charges a wide variety of student tuition, that further differ for in-state and out-of-state students State schools offer a wide variety of programs, not all of which are related to the maritime industry, require a Merchant Marine license, or lead to a military commission This broad SMA graduate profile makes comparing CPG between the firm technical standard of USMMA graduates and the varying standard of SMA graduates an apples to oranges analysis, further complicated by a complex system of subsidies and tuitions It is not uncommon for CPG comparisons to include all SMA graduates in the denominator, including those who did not major in a maritime field; or receive a maritime license; or receive a military commission; or incur any sort of obligation

5 Cost Per Graduate A valid Cost Benefit Analysis would consider only the costs to graduate a comparable graduate to the same technical standard, as well as provide a well articulated justification for the need to meet that technical standard The Office of Management and Budget has a defined Technical Standard for USMMA that every graduate must meet: (Title 46 USC) USMMA graduates serve as merchant marine officers and military reservists to meet national defense, homeland security and reserve fleet mobilization needs Each receives a B.S. degree, unlimited USCG license, and a military commission, and has a service obligation comparable to other federal academies OMB does not define a technical standard for the SMAs, rather it justifies MARADs investment in the SMAs as: The purpose of the State Maritime School program is to partner with the six State maritime academies to produce highly qualified officers to replenish the nation's supply of skilled merchant mariners An Apples to Apples comparison should consider the same technical standard BS degree + unlimited USCG license + military commission + service obligation 5

6 SMA Cost Per Graduate Comparing Cost Per Graduate to the same technical standard requires an understanding of how many students within the SMA population meet this same technical standard According to US News and World Report the collective SMA population is ~7,000 students According to MARAD ~575 SMA graduates were on track to graduate with a USCG license in 2013 (data includes any USCG license - it is unclear how many are unrestricted ) According to the Commander, Naval Reserve Force, ~70 SMA graduates were offered commissions in 2013 and constitute the only graduates with any service obligation (these 70 SMA graduates are the only ones trained to the same technical standard as USMMA) The decision maker must consider which SMA CPG option to use - only those SMA graduates with the same technical credentials as a USMMA graduate only those SMA graduate with an Unlimited USCG Merchant Marine License only those SMA graduates with any USCG Merchant Marine License regardless of level or, all graduates of the SMAs regardless of degree Understanding the justification for USMMA s technical standard requires a discussion of defense strategic sealift requirements that can be covered in a 6 separate brief

7 Cost Per Graduate (CPG) CPG Calculation Options (FY14 USMMA data) USMMA simple Cost Per Graduate: $60.1M / Graduates = Avg CPG $259k 285k If the 75 to 100 SMA SSO graduates move to USMMA Avg CPG decreases to $ k Technical Standard: Maritime B.S. Degree, Unlimited License w/full STCW Compliance, Navy SSO Commission, Service Obligation State Maritime Academies: simple Cost Per Graduate (does not include Galveston or Great Lakes - data not available). AVG CPG: $237k Technical Standard: The state maritime academy statistics below do not differentiate between graduates who obtain credentials identical to USMMA and those which do not The cost of graduates produced by SMAs to the same technical standard as USMMA will be a different value than the figures presented below 7

8 Federal Support of SMAs All six State Maritime Academies receive Federal, State, and University subsidies MARAD (Federal Investment) currently budgets $17.1M to the State Maritime Academies for tuition assistance scholarships (SIP) and Operating expenses for Training Ships and Campus Maintenance For that $17.1M investment, 70 graduates incurred a Federal service obligation ($244k per graduate) The remaining ~ 500 licensed graduates have no service obligation in exchange for that investment, and no restriction from sailing on foreign flagged ships The remaining ~ 1,180 SMA students, not participating in a license program, have no service obligation for the investment (Assumes US News and World Report SMA population of 7,000 students) 8

9 Conclusions While this discussion was focused on Cost Per Graduate, based on the Senator s question, the discussion needed goes much deeper The USMMA-AAF believes a vibrant maritime economy requires two systems that complement each other not compete with each other The SMAs perform a valuable, but fundamentally different, purpose than USMMA, primarily focused on a private need USMMA is a Federal Service Academy primarily focused on meeting a public need The USMMA-AAF would be happy to come back to discuss any of the following at your convenience: USMMA s role in meeting the needs of the Maritime Industry USMMA s unique role in meeting National defense strategic sealift needs in wartime and daily military sealift needs in peacetime USMMA s role in defining the Federal Government s position on training and education in the maritime industry USMMA s possible support of the Arctic Roadmap - defense, security, and trade along the expanding Northwest Passage USMMA and the SMAs complement each other to meet the Nation s needs; costs are different because missions and needs are different 9

10 Thank You United States Merchant Marine Academy Alumni Association & Foundation Supporting leaders of character and ability, dedicated to serving the nation's dynamic Sea-Power requirements in peace and war Contact Information: Connie Buhl Chairman USMMA Alumni Association & Foundation 14 Bond Street #1000 Great Neck, NY (206) mobile (516) office 10

11 United States Merchant Marine Academy 2013 U.S. News Best Colleges Rankings #3 Regional College (North Region) Best Undergraduate Engineering Program #2 Top Public School (North Region) #22 Best Engineering Program Nationally Most Popular Majors Marine Transportation Logistics & Intermodal Transportation Marine Engineering Marine Systems Engineering Shipyard Management All degrees lead to USCG License Federal Service Academy 2014 Quick Stats Tuition $1,500 in-state $1,500 out-of-state Students 987 enrolled 86% male 14% female Admissions 12.3% accepted Congressional Nomination Average ACT: 27 Average SAT: 1256* Candidates also applied to US Naval Academy US Coast Guard Academy US Military Academy Ranking - U.S. News and World Report School data - US Dept. of Education 11 (IPEDS) * USMMA Class of 2017 Entry Data

12 SUNY Maritime College 2013 U.S. News Best Colleges Rankings #21 Regional College (North) Most Popular Majors Engineering Engineering Technology Biology Interdisciplinary Studies Business Some degrees lead to USCG License, participation is not mandatory 2014 Quick Stats Tuition $7,109 in-state $16,559 out-of-state Students 1,614 enrolled 90% male 10%female Admissions 57.6% accepted Average ACT: 20 Average SAT: 1105 Students also applied to US Merchant Marine Academy Maine Maritime Academy Mass Maritime Academy State University of New York System Ranking - U.S. News and World Report 12 School data - US Dept. of Education (IPEDS)

13 Massachusetts Maritime Academy 2013 U.S. News Best Colleges Rankings #7 Regional College (North) * Tie with Maine Maritime Most Popular Majors Naval Architecture Marine Science International Business Environmental Science Law Enforcement Some degrees lead to USCG License, participation is not mandatory 2014 Quick Stats Tuition $7,519 in-state $23,097 out-of-state Students 1,312 enrolled 90% male 10%female Admissions 77.3% accepted Average ACT: 20 Average SAT: 1030 Students also applied to Not available Ranking - U.S. News and World Report 13 School data - US Dept. of Education (IPEDS)

14 Maine Maritime Academy 2013 U.S. News Best Colleges Rankings #7 Regional College (North) * Tie with Mass Maritime Most Popular Majors Marine Transportation International Business Engineering Technology Naval Architecture Biology Some degrees lead to USCG License, participation is not mandatory 2014 Quick Stats Tuition $16,490 in-state $22,770 out-of-state Students 970 enrolled 86% male 14% female Admissions 66.0% accepted Average ACT: 20 Average SAT: 1010 Students also applied to College of the Atlantic Hudson University Mass Maritime Academy Affiliated with the New England Assn of 14 Schools and Colleges Ranking - U.S. News and World Report School data - US Dept. of Education (IPEDS)

15 California Maritime Academy 2013 U.S. News Best Colleges Rankings #2 Regional College (West) Most Popular Majors Business Administration Facilities Engineering Global Studies & Maritime Affairs Marine Engineering Marine Transportation Mechanical Engineering Some degrees lead to USCG License, participation is not mandatory 2014 Quick Stats Tuition $7,956 in-state $20,604 out-of-state Students 974 enrolled 87% male 13%female Admissions 75.1% accepted Average ACT: 21 Average SAT: 1052 Students also applied to Cal Poly San Louise Obispo San Diego State University San Jose State University California State University School System Ranking - U.S. News and World Report 15 School data - US Dept. of Education (IPEDS)

16 Great Lakes Maritime Academy 2013 U.S. News Best Colleges Rankings Not Ranked Most Popular Majors Business Administration* * BA from Ferris State University Degree leads to USCG license 2014 Quick Stats Tuition Not Available Students ~300 enrolled Not available Admissions 25% accepted Average ACT Not available Average SAT Not available Students also applied to Not available Part of Northwestern Michigan College in partnership with Ferris State University Ranking - U.S. News and World Report 16 School data - US Dept. of Education (IPEDS)

17 Texas A&M Maritime Academy 2013 U.S. News Best Colleges Rankings Not Ranked Most Popular Majors Marine Biology Marine Sciences Marine Engineering Technology Marine Transportation Marine Fisheries Maritime Systems Engineering Maritime Administration Maritime Studies University Studies Ocean and Coastal Resources Some degrees lead to USCG license, Participation not mandatory Satellite of Texas A&M University 2014 Quick Stats Tuition Not Available Students 2,167 enrolled Not Available Admissions % Accepted - Not Available Average ACT: 22 Average SAT: 1070 Students also applied to Texas A&M College Station Texas A&M Corpus Christi Texas State University Ranking - U.S. News and World Report 17 School data - US Dept. of Education (IPEDS)

18 United States Military Academy 2013 U.S. News Best Colleges Rankings #17 National Liberal Arts College Most Popular Majors Engineering Social Science Foreign Language Engineering Technology History Federal Service Academy 2014 Quick Stats Tuition $0 in-state $0 out-of-state Students 4,592 enrolled 84% male 16% female Admissions 8.9% accepted Congressional Nomination Average ACT: 27 Average SAT: 1230 Students also applied to US Air Force Academy US Coast Guard Academy US Merchant Marine Academy Ranking - U.S. News and World Report 18 School data - US Dept. of Education (IPEDS)

19 United States Naval Academy 2013 U.S. News Best Colleges Rankings #12 National Liberal Arts College Most Popular Majors Political Science History Aerospace Oceanography Systems Engineering 2014 Quick Stats Tuition $0 in-state $0out-of-state Students 4,536 enrolled 79% male 21%female Admissions 6.8% accepted Congressional Nomination Average ACT: Not Available Average SAT: 1255 Students also applied to US Military Academy US Air Force Academy Federal Service Academy Ranking - U.S. News and World Report 19 School data - US Dept. of Education (IPEDS)

20 United States Air Force Academy 2013 U.S. News Best Colleges Rankings #25 National Liberal Arts College Most Popular Majors Engineering Social Science Interdisciplinary Studies Business Administration Biology Federal Service Academy 2014 Quick Stats Tuition $0 in-state $0 out-of-state Students 4,120 enrolled 78% male 22% female Admissions 9.9% accepted Congressional Nomination Average ACT: 30 Average SAT: 1269 Students also applied to US Military Academy US Naval Academy US Coast Guard Academy Ranking - U.S. News and World Report 20 School data - US Dept. of Education (IPEDS)

21 United States Coast Guard Academy 2013 U.S. News Best Colleges Rankings #2 Regional College (North) Most Popular Majors Engineering Marine Biology Political Science Business Administration Mathematics 2014 Quick Stats Tuition $0 in-state $0 out-of-state Students 967 enrolled 68% male 32% female Admissions 15.9% accepted Average ACT: 28 Average SAT: 1255 Students also applied to US Air Force Academy US Merchant Marine Academy US Military Academy Federal Service Academy Ranking - U.S. News and World Report 21 School data - US Dept. of Education (IPEDS)

22 Common Misconceptions 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Misconception The SMAs can meet the emergency Strategic Sealift needs of the Department of Defense in wartime alone. Proportion of USMMA sourced Strategic Sealift Officers to State Maritime Schools USMMA TEXAS MRTM NY MRTM MASS MRTM MAINE MRTM GLAKES MRTM DCO CAL MRTM Source: Commander, Naval Reserve Force - USMMA produces Strategic Sealift Officers per year to meet TRANSCOM, Fleet Forces Command, and MSC demand, representing more than 75% of the Strategic Sealift Officer Community - Collectively, the six SMAs produce between 70 and 75 SSOs annually During Iraqi Freedom, the activation of the Ready Reserve Fleet would not have been possible without USMMA graduates; and in general, sufficient licensed mariners would not be available for strategic sealift during times of war or to meet commercial maritime 22 requirements during periods of peace Office of Management and Budget

23 Common Misconceptions Misconception The SMAs can meet the everyday Sealift needs of the Military Sealift Command in peacetime alone. - USMMA graduates make up >30% of Military Sealift Command s licensed workforce - USMMA s contribution is more than twice the next two SMA contributions combined - USMMA s contribution is more that Great Lakes, Maine, Texas, and Mass combined Source: U.S. Fleet Forces Command & Military Sealift Command MSC began a pilot program in 2012 assigning a full time SSO Active Duty Navy Officer (hand selected by Commander, Military Sealift Command) to the Commandant's Staff at USMMA to serve as a Company Officer and recruiting advocate for Military Sealift Command 23

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