The University’s undergraduate tuition rate will see a 5.6-percent increase during the 2008-2009 academic year. The measure approved by a unanimous vote of the University’s Board of Regents on June 19 means that in-state freshmen in the College of Literature, Science and the Arts will pay $11,037 to attend the University.
That figure represents a $590 increase from last year’s rate for in-state students.
Out-of-state undergraduate students will see a $1,768 tuition increase, putting a new $33,069 price tag on one year of education at the University.
The Board also approved an additional 5-percent tuition increase for students in the Rackham School of Graduate Studies.
The University is expected to receive $54 million in additional revenue from the new tuition rates.
Along with increases in tuition, the Board also approved a 10.8-percent increase in undergraduate financial aid provided by the University’s general fund. The budget now sets aside $107.6 million for financial aid – up from the $99 million awarded from the general fund last year.
The new funding represents an 8.6-percent across-the-board increase in all financial aid.
Provost Teresa Sullivan said the expanded financial aid would ensure every student could have full access to an education at the University. She said tuition was increased faster than the rate of inflation only after cost-cutting measures were taken and the University’s budget was carefully evaluated.
“I want to make the case in terms of access: that Michigan tuition is affordable to all Michigan kids,” Sullivan said. “We have had and continue to have a financial aid package that makes it possible for any Michigan resident to attend the University.”
The regents approved the new measures by a voice vote. There was no discussion of the budget or the tuition increases during the meeting before the Regents’ approved it.
Along with next year’s higher tuition rates and increased financial aid, the regents also approved a 4-percent increase in existing faculty and staff salaries.
Sullivan said the salary increase was necessary so that the University could remain competitive with other elite colleges and universities.
“We are in desperate competition for the top minds with the rest of the schools around the country and increasingly with schools around the world,” Sullivan said. The information presented to the regents cited schools like Harvard, Yale and Princeton as some of the University’s top competitors in the fight for faculty.
Philip Hanlon, vice provost for academic and budgetary affairs, said this year’s budget also includes $19.5 million in cuts or reallocations to the general fund.
Despite taking more than $117 million in cost-cutting measures over the past five years, Hanlon said this year’s general fund budget would still include a 4.54-percent increase in total spending.
This year’s total budget expenditure will be approximately $1.4 billion.
Hanlon said this year’s larger budget can be attributed to factors other than financial aid and salary increases, including additional funding to hire 100 new interdisciplinary faculty, rising energy costs and more comprehensive medical benefits for University employees.
Though the newly approved faculty hiring is expected to take five years, Hanlon said the new positions would eventually decrease the student-to-instructor ratio to 14.8:1 from its current ratio of 15.1:1.
Hanlon said bringing in more faculty would help keep the University competitive in the area of research. Sullivan added that the new hires would help improve the University’s undergraduate program and enhance the “academic vitality” of campus.
All of the decisions for this year’s budget were based on a projected 2-percent increase in state funding that would allocate roughly $320 million to the University.
Even if the University receives more than the projected 2-percent boost in state funding, though, Sullivan said the new tuition increases are almost certainly here to stay.
“I think that we will invest instead to give a better experience to the students who are here,” Sullivan said.
If the University does receive more state funding than anticipated, she said that money would be used to accelerate the new faculty hiring process.
Though the regents normally approve the University’s budget after state allocations have already been determined, Sullivan said the earlier decision was meant to help students who are making plans to pay for their education.
“I felt it was unfair, particularly for our entering students, to have to wait so long to know what their tuition is,” Sullivan said. “This way we’ll be able to let students know much earlier what the tuition bill is going to look like, and that was really our biggest reason.”