At an intimate meeting yesterday, University President Mary Sue Coleman told students how the University will help them cope with financial hardships over the next year, but admitted it was too early to tell whether a tuition increase was on the horizon.

Coleman met with approximately 40 students yesterday in her last fireside chat of the year. Coleman hosts an invitation only fireside chat with students each month to discuss any concerns they have about the University.

Coleman focused a major part of the chat on explaining the budget process and responding to student concerns about University finances. Vice President for Student Affairs Royster Harper also fielded questions from students.

Coleman said the budget process begins by examining expenses that are expected to rise — like energy and utility costs, unionized employee salaries and supply costs — and then reviewing individual schools’ budgets. At the same time, Coleman said expected revenue levels are considered to make sure they will cover the budgeted expenses.

Coleman said pinpointing revenue levels has been very difficult this year because of several variables that are still up in the air.

“That’s been particularly challenging this year because we don’t know what’s going to happen with the state (appropriations),” she said. “That’s a moving target right now.”

When Coleman opened the floor for questions, students asked her whether she expected a tuition increase next year and how much the increase could be. Coleman told students it was too early to know whether an increase would be necessary, but said she would know what the tuition rates would be in June, when the budget is submitted to the University Board of Regents.

Several students asked Coleman what the University was planning to do to help students deal with the burden of rising tuition levels that have made it difficult for some students to afford tuition.

Coleman didn’t offer specifics on any new programs at the University, but told students that several federal initiatives will help make tuition more affordable next year.

Coleman said the American Opportunity Tax Credit, which will offer a $2,500 higher education tax credit to individuals making less than $80,000 a year or couples making less than $160,000 a year, will help to make tuition more affordable.

Additionally, Coleman said increases to work study programs will create 440 new job opportunities for University students and give an additional $1.6 million to students over the next two years.

Finally, Coleman said the $619 increase to individual Pell Grants would benefit as many as 3,300 students on campus. The increase will make the average Pell Grant award $5,050 for the year.

Several students also asked Coleman what the University is doing to cut costs or increase revenue streams so that tuition rates don’t need to be increased.

Coleman responded that every year the deans of each school submit budget plans that would eliminate 1 percent, 3 percent and 5 percent of their budget. Based on the plans, administrators can then determine how much to cut from each budget.

“My own office, I’ve got to cut 1 percent out of my budget this year,” Coleman said. “I don’t know yet how I’m going to do it, but I’m going to do it because we have to.”

One student raised concerns that with that process, deans may have an incentive to pad their budgets with extra money, so that their cuts aren’t as fully realized. Harper told the student that because of the process in place and the level of detail required in budget proposals, that wouldn’t be possible.

A different student recommended to Coleman that she and other University executives take pay cuts to help cut expenses at the University. Coleman didn’t say she was planning to take a cut, but avoided the question by saying she couldn’t speak for other University executives. Though she has donated pay increases back to University causes, Coleman accepted the salary boost she was awarded by the regents in September. At about $760,000 in total compensation, Coleman currently ranks fifth among the highest-paid public university presidents, according to The Chronicle of Higher Education.

She continued by explaining that competitive salaries are required to attract quality employees, both for administrators and faculty members.

Students raised other concerns, including the amount of money spent on faculty retention incentives and the lack of transparency in the University budget. Students also gave Coleman recommendations, which ranged from more socially responsible investment practices to higher payouts from the endowment.

Before the meeting ended, Coleman told students a new website will launch Monday that will include information about the University’s budget, in an effort to better inform students and members of the University community about what the University is doing to prevent additional financial burdens on students and their families.

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