In the June meeting of the University Board of Regents, the board voted 6-1 in favor of increasing tuition by 2.7 percent for in-state students and 3.7 percent for out-of-state students.
For in-state LSA students, the tuition increase is approximately $370 per year, an increase University President Mark Schlissel said he felt was appropriate.
“The budget approved today by regents allows the University of Michigan to pursue academic excellence at the highest levels while continuing to support our outstanding educational programs in a fiscally responsible manner,” Schlissel said.
The increase is considerably larger in comparison to the 1.6 percent increase from last year, and the 1.1 percent increase the preceding year. Provost Martha Pollack leads this process of determining the University’s General Operating Budget — which includes the cost of tuition — each year.
Vice Provost Al Franzblau said the substantial tuition increase was a result of the decrease in funding from the state of Michigan this year in comparison to recent years. The state of Michigan allocated the University an increase in funding of 1.4 percent when their budget was finalized in early June — an increase that fares less than the rate of inflation.
“For fiscal year ’15, the state of Michigan allocation to the University of Michigan was increased 5.76 percent from what it had been in fiscal year ’14.” Franzblau said. “That amounted to just over 16 million additional dollars. For fiscal year ’16, the amount the state allocated to us represents an increase of 1.44 percent from fiscal year ’15, and that, in dollar amounts, was about 4.25 million.”
According to Franzblau, the increased tuition was to make up for the discrepancy in state funding.
“There’s about a $12 million difference in the increment of what the state allocated to the University between fiscal year ‘15 and fiscal year ‘16,” Franzblau said. “That difference of $12 million is roughly on the border of what a 1 percent increase in tuition is.”
Regent Andrea Fischer Newman was the only regent to vote against the tuition increase. The vote itself is significant because the regents have voted unanimously on nearly every proposal this year, with the exception of the May meeting vote on a new golf clubhouse, which, before discussion, they had initially voted unanimously on as well.
At the meeting, Newman said her decision to vote against the proposal was in the mindset of ensuring students of all income brackets can afford to attend the University.
“Some parents are able to provide their children with the financial resources necessary to pay room, board, tuition fees and books,” Newman said. “For others, higher education is out of the question without loans, grants and other forms of aid … We need to fix this problem or we are going to price the middle class out of higher education, or burden them with so much debt they’ll never get out.”
To compensate for the increase in tuition, an 8.12 percent increase from fiscal year 2015 in financial aid funds was included in the budget. The percent increase amounts to $70,000.
“The University will meet the full demonstrated need for all in-state students,” Franzblau said. “We do not have the resources to make the same degree of commitment to out-of-state students, but we have been increasing our commitment to out-of-state students over the last few years.”
Proponents of the tuition increase, such as Regent Mark Bernstein, agree with Franzblau, justifying the increase in tuition costs with the increase in financial aid.
“My sense about tuition is that it is largely a superficial conversation, literally, because the focus should be on net tuition: what a student actually pays to attend the University of Michigan,” Bernstein said. “The way you reduce net tuition — the primary way in my opinion — is by utilizing money raised from this very modest tuition increase to help make college more affordable for middle class and lower income students.”
Bernstein stressed the complexity of reducing operating costs at a university. Unlike other businesses, where costs can be cut by outsourcing or using cheaper materials, at a university, this same method does not apply.
“[The University] is an enormously complex institution that’s constantly ringing out expenses,” Bernstein said. “The challenge is that we are in a human capital business at the end of the day. The reason why students and faculty come to this university is because we attract the best and brightest students, faculty, researchers, administrators. The normal sources of cost cutting that are available to other types of enterprises are not readily available to us.”
Bernstein also noted additional costs the University has to expend which other institutions do not.
“At the same time, there are many other responsibilities a university has that other organizations don’t,” Bernstein said. “We have a responsibility, and I strongly believe in it, to address sexual assault. We have students with disabilities who need support and mobility. We have mental health needs and issues to address with our students — all of which are entirely appropriate and necessary to do and is a part of the administrative aspect of the University.”
Pollack said the increase in tuition is necessary in order to ensure the University’s commitment to greatness.
“We must continue to have capacity to provide our students with a world-class education that prepares them to drive in the 21st century, and we must continue to invest in financial aid to ensure access to all qualified students,” Pollack said. “This budget emphasizes these goals while continuing our cost containment efforts and our strategic use of philanthropic resources to moderate tuition increases.”
Typically, the state of Michigan includes a tuition cap in its budget, which reflects double the amount of projected inflation. Publicly funded state universities that increase tuition by a greater percentage of what is recommended do not receive an increase in performance funding by the state for the following year.
This year, the state of Michigan’s tuition cap was set at 2.8 percent — 0.1 percent more than the University increased its tuition.
In addition to the increase in tuition funding, the board voted to increase room and board fees by 3 percent. One percent of the increase is for projected increases in operating costs; the remaining 2 percent increase is to continue to fund renovations, such as the current West Quad remodeling.