analysis for sen begich - usmma and smas[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

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

want to focus on misconceptions about “CPG” 2

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

Cost Per Graduate

• In its simplest form, CPG can be defined as

• 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

Education and Training Investment Number of Graduates

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

Understanding the justification for USMMA’s technical standard requires a

discussion of defense strategic sealift requirements that can be covered in a

separate brief

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

6

Cost Per Graduate (CPG)

CPG Calculation Options

(FY14 USMMA data)

– USMMA simple Cost Per Graduate:

• $60.1M / 215 - 238 Graduates = Avg CPG $259k – 285k

• If the 75 to 100 SMA SSO graduates move to USMMA

Avg CPG decreases to $225-234k

– 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

Technical Standard: Maritime B.S. Degree,

Unlimited License w/full STCW Compliance,

Navy SSO Commission, Service Obligation

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

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

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 11021

(206) 605-4685 – mobile

(516) 773-5993 – office

[email protected] 10

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

2014 Quick Stats • 2012-2013 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 (IPEDS) * USMMA – Class of 2017 Entry Data

Federal Service Academy

Most Popular Majors • Marine Transportation

• Logistics & Intermodal Transportation

• Marine Engineering

• Marine Systems Engineering

• Shipyard Management

All degrees lead to USCG License

11


• #21 Regional College (North)


– $7,109 in-state


• Students – 1,614 enrolled

– 90% male

– 10%female


– 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

Most Popular Majors • Engineering

• Engineering Technology

• Biology

• Interdisciplinary Studies

• Business

Some degrees lead to USCG License,

participation is not mandatory

Ranking - U.S. News and World Report School data - US Dept. of Education (IPEDS)

SUNY Maritime College

12

Massachusetts Maritime

Academy


• #7 Regional College (North) * Tie with Maine Maritime


– $7,519 in-state


• Students

– 1,312 enrolled

– 90% male

– 10%female

• Admissions

– 77.3% accepted

– Average ACT: 20


• Students also applied to

– Not available

Most Popular Majors • Naval Architecture

• Marine Science

• International Business

• Environmental Science

• Law Enforcement




13

Maine Maritime Academy


• #7 Regional College (North) * Tie with Mass Maritime


– $16,490 in-state



– 86% male

– 14% female


– Average ACT: 20


• Students also applied to – College of the Atlantic

– Hudson University

– Mass Maritime Academy

Most Popular Majors • Marine Transportation

• International Business


• Naval Architecture

• Biology




Affiliated with the New England Assn of

Schools and Colleges 14

http://en.wikipedia.org/wiki/File:NEASC_logo.png

California Maritime

Academy


• #2 Regional College (West)


– $7,956 in-state



– 87% male

– 13%female


– Average ACT: 21


• Students also applied to – Cal Poly San Louise Obispo

– San Diego State University

– San Jose State University

California State University School System

Most Popular Majors • Business Administration

• Facilities Engineering

• Global Studies & Maritime

Affairs

• Marine Engineering

• Marine Transportation

• Mechanical Engineering




15

http://en.wikipedia.org/wiki/File:Seal_of_the_California_State_University.png

Great Lakes Maritime

Academy


• Not Ranked

2014 Quick Stats

• 2013-2014 Tuition

– Not Available

• Students

– ~300 enrolled

– Not available

• Admissions

– 25% accepted

– Average ACT – Not available

– Average SAT – Not available


– Not available

Most Popular Majors • Business Administration*

* BA from Ferris State University

Part of Northwestern Michigan College in

partnership with Ferris State University Ranking - U.S. News and World Report School data - US Dept. of Education (IPEDS)

Degree leads to USCG license

16

Texas A&M Maritime

Academy


• Not Ranked


– Not Available

• Students

– 2,167 enrolled

– Not Available

• Admissions

– % Accepted - Not Available

– Average ACT: 22



– Texas A&M College Station

– Texas A&M Corpus Christi

– Texas State University

Satellite of Texas A&M University

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


17

United States Military

Academy


• #17 National Liberal Arts College


– $0 in-state

– $0 out-of-state


– 84% male

– 16% female



– Average ACT: 27


• Students also applied to – US Air Force Academy


– US Merchant Marine Academy



• Social Science

• Foreign Language


• History


18

United States Naval

Academy




– $0 in-state

– $0out-of-state


– 79% male

– 21%female



– Average ACT: Not Available


• Students also applied to – US Military Academy

– US Air Force Academy


Most Popular Majors • Political Science

• History

• Aerospace

• Oceanography

• Systems Engineering


19

United States Air Force

Academy




– $0 in-state

– $0 out-of-state


– 78% male

– 22% female



– Average ACT: 30


• Students also applied to – US Military Academy

– US Naval Academy




• Social Science

• Interdisciplinary Studies

• Business Administration

• Biology


20

United States Coast Guard

Academy


• #2 Regional College (North)


– $0 in-state

– $0 out-of-state


– 68% male

– 32% female


– Average ACT: 28 Average SAT: 1255

• Students also applied to – US Air Force Academy

– US Merchant Marine Academy

– US Military Academy



• Marine Biology

• Political Science

• Business Administration

• Mathematics


21

Common Misconceptions

• Misconception – The SMAs can meet the emergency Strategic

Sealift needs of the Department of Defense in wartime alone.

“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

requirements during periods of peace” – Office of Management and Budget

- USMMA produces 200-250

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012

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

22

Common Misconceptions

• Misconception – The SMAs can meet the everyday Sealift needs of

the Military Sealift Command in peacetime alone.

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

- 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

23

analysis for sen begich - usmma and smas[1]

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