The document discusses the costs and benefits of closing the United States Merchant Marine Academy (USMMA) in favor of increasing funding to the six State Maritime Academies (SMAs). It argues that closing USMMA would damage national security and hurt the maritime industry. While the SMAs play an important role in training maritime professionals, USMMA is uniquely designed and mandated to meet the defense needs of the U.S. military, which the SMAs are not focused on. A valid cost comparison would need to consider the technical standards and outputs of graduates from each school to determine relative value.

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 want to focus on misconceptions about “CPG”
2

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
•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

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. 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

7. 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

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 11021
(206) 605-4685 – mobile
(516) 773-5993 – office
Connie.Buhl@alumni.usmma.edu
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
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

12. 2013 U.S. News Best Colleges Rankings
•#21 Regional College (North)
2014 Quick Stats
•2013-2014 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
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

13. Massachusetts Maritime Academy
2013 U.S. News Best Colleges Rankings
•#7 Regional College (North)
* Tie with Maine Maritime
2014 Quick Stats
•2013-2014 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
Most Popular Majors
• Naval Architecture
• Marine Science
• International Business
• Environmental Science
• Law Enforcement Some degrees lead to USCG License, participation is not mandatory
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
13

14. Maine Maritime Academy
2013 U.S. News Best Colleges Rankings
•#7 Regional College (North)
* Tie with Mass Maritime
2014 Quick Stats
•2013-2014 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
Most Popular Majors
• Marine Transportation
• International Business
• Engineering Technology
• Naval Architecture
• Biology Some degrees lead to USCG License, participation is not mandatory
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
Affiliated with the New England Assn of Schools and Colleges
14

15. California Maritime Academy
2013 U.S. News Best Colleges Rankings
•#2 Regional College (West)
2014 Quick Stats
•2013-2014 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
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
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
15

16. Great Lakes Maritime Academy
2013 U.S. News Best Colleges Rankings
•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
•Students also applied to
–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

17. Texas A&M Maritime Academy
2013 U.S. News Best Colleges Rankings
•Not Ranked
2014 Quick Stats
•2013-2014 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
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
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
17

18. United States Military Academy
2013 U.S. News Best Colleges Rankings
•#17 National Liberal Arts College
2014 Quick Stats
•2013-2014 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
Federal Service Academy
Most Popular Majors
• Engineering
• Social Science
• Foreign Language
• Engineering Technology
• History
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
18

19. United States Naval Academy
2013 U.S. News Best Colleges Rankings
•#12 National Liberal Arts College
2014 Quick Stats
•2012-2013 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
Most Popular Majors
• Political Science
• History
• Aerospace
• Oceanography
• Systems Engineering
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
19

20. United States Air Force Academy
2013 U.S. News Best Colleges Rankings
•#25 National Liberal Arts College
2014 Quick Stats
•2013-2014 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
Federal Service Academy
Most Popular Majors
• Engineering
• Social Science
• Interdisciplinary Studies
• Business Administration
• Biology
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
20

21. United States Coast Guard Academy
2013 U.S. News Best Colleges Rankings
•#2 Regional College (North)
2014 Quick Stats
•2013-2014 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
Most Popular Majors
• Engineering
• Marine Biology
• Political Science
• Business Administration
• Mathematics
Ranking - U.S. News and World Report
School data - US Dept. of Education (IPEDS)
21

22. 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

23. 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