The University’s Board of Regents voted 6-2 to approve a 1.5-percent tuition increase for in-state students and a 3-percent tuition increase for out-of-state students at their monthly meeting Jun. 17.

The vote translates into a net increase of $178 for in-state students and $1,064 for out-of-state students. However, University officials say some students will actually pay less to attend the University next year.

In a briefing with media outlets prior to the Board of Regents meeting, University Provost Teresa Sullivan, who will be leaving to assume the presidency at the University of Virginia later this summer, and Philip Hanlon, the University’s Vice Provost for Academic and Budgetary Affairs who will take the post of University Provost in July, said the University is committing to a 10.6-percent increase in centrally-awarded student financial aid from the University and a new Economic Hardship Program created to help Michigan families.

“Many students and their families will pay less to attend the University in the coming year than they did last year,” Sullivan said, citing the University’s commitment to meet the full demonstrated financial need of in-state students.

The in-state tuition increase of 1.5 percent is the smallest approved by the Board of Regents since 1984.

Sullivan said a major reason the modest increase was possible was due to a commitment within the University to cost containment, which will save $39 million in recurring expenses next year alone.

“As a consequence of our sustained efforts, we have a stable financial base from which we can continually enhance the educational experience of our students,” Sullivan said in a statement at the briefing.

In her presentation to the regents, Sullivan warned that much is left uncertain at the state level, which could alter the University’s budget or even tuition levels.

“An important assumption we must make in advance of the state’s fiscal year 2011 budget is the size of the state appropriation,” Sullivan said. “We assume that we will receive 315.1 million (dollars), which is the Senate subcommittee recommendation. This reflects a 1.4 million (dollar) reduction from what we budgeted in fiscal year 2010.”

However, Sullivan added that the state’s appropriation could end up coming in lower.

“There is a possibility that the assumption make here is too optimistic,” she said while showing the regents a slide titled, “Contingency Planning.”

The slide, among other things, said University President Mary Sue Coleman and Hanlon may have to seek a mid-year tuition increase if the appropriation is significantly less than is currently expected.

Prior to voting on the budget, several regents explained their rationale behind their votes, including Regent Denise Ilitch (D–Bingham Farms) who voted against it.

“We can do more and we must lead by example,” Regent Denise Ilitch (D–Bingham Farms) said before voting against the budget proposal. “It should no longer be the assumption that each year we will raise tuition.”

Regent Andrea Fischer Newman (R–Ann Arbor) also voted against the General Fund budget and tuition proposals.

Several other universities have already approved their tuition increases, including Eastern Michigan University, which chose to forgo any tuition increase, and Michigan Tech, which raised its tuition rates by 5.9 percent, making it the most expensive public university in the state.

The University of Virginia, where Sullivan will become president on August 1, announced its students would see a 9.9-percent increase in tuition levels next year.

The University of Wisconsin approved a 8.1-percent tuition increase earlier this year and Ohio State University announced the cost of attendance for their students would be 8.5 percent more than its value last year.

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