U of M Regents OK Kaler’s Budget, 3.5% Tuition Hike

The 3.5 percent tuition increase for undergraduate Minnesota residents will be the lowest year-over-year hike in more than a decade; the budget for the 2012-2013 school year also calls for a 4.8 percent resident tuition increase for daytime MBA students.

The University of Minnesota Board of Regents on Friday approved a budget that calls for a 3.5 percent undergraduate tuition increase for Minnesota residents in the upcoming school year, according to a university news release.

President Eric Kaler’s budget for the 2012-2013 academic year also calls for a 4.8 percent tuition increase for daytime resident MBA students at the university’s Carlson School of Management.

Kaler first presented his budget proposal to the board last month. At its meeting Friday, the board unanimously approved the budget after incorporating one change—lowering the tuition hike for resident MBA students from the proposed 10.4 percent.

University officials have stressed that the 3.5 percent undergraduate resident tuition increase is the lowest year-over-year raise in more than a decade. Annual tuition increases in the past decade have ranged from 4.5 percent to 16 percent, the university said at the time it first announced Kaler’s budget.

To help offset the tuition increases, the university will beef up its need-based aid program for resident undergraduates—Promise Scholarship—by 14 percent and dedicate an additional $2.8 million in new money for merit-based aid programs.

Meanwhile, all U employees will see a $500 raise applied to their annual base salaries, plus merit-based raises of up to 2.5 percent of their salaries. The U also plans to add about 100 new faculty positions.

In addition, the budget includes the creation of two new investment pools: a $3 million fund for research-related infrastructure projects and a $1 million fund for investments in instructional technology.

At Friday’s meeting, Kaler and his staff presented studies that outline the costs incurred by the university during the 2009-2010 academic year—the most recent year for which complete information is available.

According to the studies, the university spent about $1.12 billion on instruction of the university’s nearly 70,000 students, which includes faculty salaries and expenses related to classroom and lab equipment and technology. Research expenses during the year totaled $870.8 million, while student aid cost $299.1 million. The university spent $251.8 million on auxiliary services, which include intercollegiate athletics, book stores, housing, dining services, and parking.

Meanwhile, the studies reported that the university’s main sources of revenue are tuition (92 percent of which is used to support instruction and 8 percent for student aid), state appropriations, foundation support, and research grants.

“If we don’t measure things, we won’t know how we can improve them,” Kaler said in a statement. “As we continue to focus on operational excellence at the university, these analyses establish a structure for our work. They also provide transparency and accountability about what we do.”

The university employs about 25,000 people in Minnesota, making it one of the five largest employers in the state.