U of M president proposes modest tuition increase

What: University of Minnesota Board of Regents meeting
When: Thursday, June 11 and Friday, June 12
Where: Sixth floor, McNamara Alumni Center, 200 Oak St. S.E., Minneapolis

Access, affordability and academic excellence are at the center of University of Minnesota President Eric Kaler’s proposed fiscal year 2016 (FY16) operating budget.

The U’s Board of Regents will review the proposed FY16 $3.7 billon operating budget in the Finance Committee on June 11 and at the full Board meeting June 12. Regents will also take comments from the University community and members of the general public during a public forum from 12:30 – 1:30 p.m. on June 12. More details, including sign up information, are available here.

Because the Legislature did not fully fund the University’s request to freeze tuition for undergraduate, graduate and professional resident students for another two years, the president is recommending a small tuition increase of 1.5 percent for resident undergraduate students. This is the lowest percentage increase for resident undergraduates since 1999-2000.

“We worked hard to secure funding to extend the tuition freeze,” said Eric Kaler. “The University did our part reducing administrative costs by an estimated $17.4 million to help offset our need for revenue. That, combined with the Legislature’s new investment, allows us to keep the increase to 1.5 percent, or about $180 annually.”

The proposed budget includes tuition increases averaging 2.5 percent for resident graduate and professional students. Tuition would increase 7 percent, or $1350 annually, for non-resident undergraduate students on the Twin Cities campus. Currently, tuition for out of state undergraduate students on the Twin Cities campus is $19,310, which places it lowest among its peer institutions in the Big Ten.

“While some legislators and others have encouraged the University to aggressively shift more tuition to out of state students, we need to balance our long term goal of moving our rate to the middle of the Big Ten, with the short term market,” Kaler explained. 

Kaler stressed that low- and middle-income students will largely have the tuition increase offset by financial aid. Specifically, net tuition for students with family incomes $100,000 and below will remain flat through a combination of institutional aid, and state and federal sources. State and federal income-based aid funds will offset the increase for students with family incomes $80,000 and lower. Kaler is proposing to invest $600,000  in U of M Promise Scholarships  to cover the increase for students with family incomes between $80,000 and $100,000. An increase of nearly $750,000 in merit-based financial aid is also proposed.

All five campuses would experience small increases in student fees and room and board rates, in the proposed budget. On the Twin Cities campus, room and board is expected to remain the lowest in the Big Ten. In all, estimated increases to the total cost increase for tuition, fees and room and board for resident undergraduates will range from 1.6 to 2.2 percent per campus.

Administrative savings of $17.4 million are proposed for FY16 as well, part of Kaler’s goal to cut $90 million by FY19. With $18.8 million in reductions in FY14 and an estimated $21.6 million for FY15, the U will be $57.8 million toward that goal in the first three years. The savings are achieved systemwide by reducing positions, leaving vacancies open, restructuring positions and/or hiring new employees at lower salary levels, program changes, as well as changes in purchasing processes and decreased spending.

The budget recommendation also calls for $48.6 million to support high priority, innovative and strategic academic initiatives, including:

• Strengthening the Human Research Protection Program: The University is planning $5.5 million in one-time and $2.3 million in recurring investments over the next couple of years to strengthen this program (the first $420,000 of which has been built into the FY16 budget), consistent with the recommendations of a external review and implementation report released this spring.
• Academic programming: Over $20 million to hire and retain field-shaping faculty, support instructional and student services, address critical infrastructure or service needs, and launch innovative programs such as “Career Bundles” in the College of Liberal Arts, which will help connect liberal arts degrees to career pathways.
• Medical School: $15 million in state funding for the Medical School to increase research capacity and improve National Institute of Health rankings; attract and retain world-class faculty, staff and students; and invest in physician training in rural and underserved communities.
• Strategic Plan: $8.4 million is proposed to advance the Twin Cities Campus Strategic Plan. A process during the upcoming academic year will be established to allocate these funds to specific initiatives.
• System campuses: Among the proposed investments are $1.9 million for the University of Minnesota Duluth for a strategic enrollment initiative and support for the new Crookston Wellness Center.

Additionally, the budget proposes a 2 percent merit-based salary pool for faculty and staff. The Board will act on the budget at a special meeting on Wednesday, June 24.

Improving operations and facilities
Regents will also review the University’s proposed FY16 capital improvement budget. To ensure the University delivers on its mission, the proposal authorizes nearly $92.9 million for the design or construction of projects.

Proposed projects include design of a new health sciences building on the Twin Cities campus, authorized by the Legislature this year; infrastructure improvements in parking, transportation, dining and housing and residential life on the Twin Cities and Duluth campuses; renovation of Cina Hall on the Duluth campus to better serve the American Indian Learning Resource Center; restoration of the historic pipe organ at Northrop; and supporting the changing needs of College of Veterinary Medicine.

Strengthening human subjects research protections
A draft work plan to strengthen the U’s human research protection program was released May 18 and open for public comment through June 1. Dr. William Tremaine, of Mayo Clinic and chair of the University’s Implementation Team, will review the final work plan, informed by public comments, in the Audit Committee, which is being held at a special time to allow all board members to attend.

The plan will create disruptive change to the status quo and will position the University as a national leader. Specific action steps include reaffirming our commitment to an ethical culture, enhancing education and training for researchers and staff, strengthening the Institutional Review Board by adding capacity and other steps, improving the U’s relationship with Fairview Health Services; and a more stringent structure to manage conflicts of interest.

The Board will also:
Honor top faculty. Three new Regents Professors, the highest honor the U bestows on faculty, will be formally approved.
Elect new leadership. The board will elect a new chair and vice chair for 2-year terms.

Committee meetings will begin 7:45 a.m. Thursday. The full Board meeting will begin 9 a.m. Friday. More information, including meeting times and locations, can be found at www.umn.edu/regents.