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New UMN budget includes tuition hike, pay raises

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University of Minnesota students from wealthier families and those from out-of-state will bear the brunt of a tuition increase planned for next school year.

University President Eric Kaler unveiled a proposed budget on Friday that includes a 2.5 percent increase in tuition, or $306, for undergraduates at the Twin Cities campus. Tuition for students who are not Minnesota residents could rise as much as 9.9 percent, or $2,040 under the plan.

University of Minnesota president Eric Kaler announces he has accepted the resignation of Gophers athletics director Norwood Teague at a news conference in Minneapolis on Friday, Aug. 7, 2015. (Pioneer Press: Jean Pieri)
University of Minnesota president Eric Kaler

But in-state students whose families earn $120,000 a year or less would have the tuition hike offset with an increase in financial aid Promise Scholarships, university leaders said. Returning out-of-state students’ tuition increases will be capped at 5.5 percent.

Undergraduate tuition at the university’s out-state campuses would be frozen for residents under the proposal. Graduate school tuition would rise an average of 2.5 percent systemwide.

In all, about half of the university system’s undergraduate students would see tuition bills increase under the proposal.

“This plan is responsive to the needs of our students and their families while being market-sensitive,” Kaler said. “My focus, as well as the Board’s, is to continue to provide students with an exceptional education at a world-class research university that is as affordable and accessible as possible.”

The budget proposal will be presented to the Board of Regents next week and they are expected to vote on it in June. A public forum about the budget is scheduled for 12:45 p.m. Friday, May 13 at McNamara Alumni Center.

COLLEGE AFFORDABILITY

Minnesota students finish college with some of the highest student loan debt in the nation, an average of $31,579 per graduate in 2014. University officials say Kaler’s budget proposal makes good use of what they called a “modest” tuition hike and other spending reallocations.

The university froze tuition between 2012 and 2014 in exchange for an increase in state funding. Tuition makes up about 52 percent of the system’s operating budget, with the rest coming from state and other resources.

If Kaler’s proposal is enacted, in-state tuition at the Twin Cities campus will have risen just 4 percent since 2012, but other cost for students have increased more quickly. Room and board is poised to grow 13 percent during that time, to $9,058, and student fees increased 28 percent, to an average of $1,596 per student.

Altogether, the cost of attendance for residents will have increased 9 percent over the last five years to $23,200 a year.

Out-of-state students are spending significantly more to attend the university and that’s not expected to change. The Board of Regents discussed a plan in February to raise non-resident tuition dramatically by 2020 for students who come from states other than Wisconsin and the Dakotas, which have tuition reciprocity agreements.

University leaders will vote in June on the plan that aims to bring non-resident tuition more closely in line with the Big Ten conference average of $35,842.

Over the past five years, tuition for out-of-state students has grown 31 percent and would hit $22,700 if the latest budget is approved.

 

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WHERE THE MONEY GOES

University leaders say their budget proposal invests wisely in people and the system’s most important initiatives.

The new spending would include:

  • About $13.6 million in salary increases, with an average pay raise of about 2.5 percent.

  • $2 million for an increase in Promise Scholarships that would help about 10,000 students offset the hike in tuition.

  • $12.2 million for ongoing campus operations.

  • $4.7 million to improve oversight of human research projects.

  • $8.4 for facilities maintenance and technology infrastructure.

WHERE THE MONEY COMES FROM

Kaler’s proposed budget anticipates no new funding from the Legislature besides the $53 million increase included in the two-year biennial budget approved last year. The university has requested $39 million in new funding be included in a supplemental budget, but state lawmakers remain at an impasse over new state spending.

Instead, Kaler’s proposal raises $13.2 million from the tuition increase and another $28 million from reallocating existing spending. About $10 million of the reallocated funding comes from a reduction in administrative costs that’s part of an ongoing effort to trim leadership expenses.


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