This fall students can expect to pay more than $1000 extra for tuition after the University Board of Regents approved a 12.3 percent hike for in-state undergraduates and a 6.9 percent raise for out-of-state students Thursday.

This year’s increase raise is about four times larger than last year’s tuition increase of 2.8 percent. The tuition raises have come after the state has cut $43 million from the University since 2002 and prepares to cut another $5.9 million if Gov. Jennifer Granholm’s budget proposal for next year is approved.

“This is unprecedented in the history of the University,” Provost Paul Courant said. There have been three consecutive years of state appropriation cuts, which is worse than the last time the University was cut for one year in 1982.

The University has responded to state funding cuts with modest tuition increases over the past several years, but these small increases were not enough for this year. A larger tuition increase is needed for the upcoming academic year, Courant said. He also warned mid-year cuts may occur, citing four consecutive years of such cuts from the state.

The University will be cutting $20.1 million in its 2006 budget by releasing staff, recalculating employee benefit packages and by canceling some courses and offering others less frequently. This is after $57.3 million was cut from the University budget since 2004. At the same time, the University will allocate another $11 million to academic pursuits like a center to work on faculty and student programs in Detroit, new teacher preparation programs in the School of Education and a Washington, D.C. internship program.

Money will also be directed to academic units to ensure LSA and Engineering students have enough class offerings to graduate in four years, Courant said.

Courant defended more money for academic programs, saying the University must change what it offers to students to keep up with their demands and be an educational leader.

“Our mission is to be on the cutting edge,” Courant said. He said that ideally about $20 million should be invested in new academic programs, but budget problems have held that figure to $11 million for next year.

To help students as tuition rises, the University will also increase financial aid from its General Fund — that contains money from state appropriations, tuition and fees and a small amount from research grants that helps cover operating costs — by 14.5 percent for in-state undergraduates and 6.3 percent for out-of-state undergraduates. In-state students will also be eligible for the aid from the University’s new M-PACT program that will allow them to replace loans with need-based grants in their financial aid packages.

The addition of these grants and the increase in General Fund grants amounts to a 28. 6 percent financial aid increase for in-state undergraduates.

The Regents also approved a 11.9 percent tuition increase for the University’s Dearborn and Flint campuses.

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