FY ’25 budget supports U-M’s strategic vision

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The University of Michigan will invest in key priorities identified in its Vision 2034 strategic vision while continuing to make a U-M education affordable for students, under the 2024-25 fiscal year budget that the Board of Regents approved June 20.

U-M’s new general fund budget of $2.9 billion for the Ann Arbor campus will support the four Vision 2034 impact areas: life-changing education; health and well-being; democracy, civic and global engagement; and climate action, sustainability and environmental justice.

While the budget includes tuition and fee increases, it also provides more than $390 million in financial support to maintain an effective zero increase in tuition costs for the typical in-state undergraduate student with need.

“We are at an inflection point for our campus and for higher education. With the launch of Vision 2034, we are building on our 200-year legacy of leadership and impact, and advancing what makes us the University of Michigan,” Provost Laurie McCauley said in her presentations to the regents.

“The fiscal year ’25 budget takes bold steps toward our vision while maintaining fiscal discipline, responsible stewardship of our resources, and our commitments to excellence, access and affordability.”

The budget for the Ann Arbor campus is part of a universitywide budget package that includes spending plans for Michigan Medicine, UM-Dearborn, UM-Flint, Athletics, Michigan Housing and supplemental student fees.

Regents approved the budget measure on a 7-1 vote, with Regents Jordan Acker, Michael Behm, Paul Brown, Sarah Hubbard, Denise Ilitch, Ronald Weiser and Katherine White voting to approve, and Regent Mark Bernstein opposed. All budgets take effect July 1.

Bernstein said his opposition stemmed from “my belief that our university has failed the vast majority of our Jewish students in addressing antisemitism on our campus.”

“Talk is cheap. We need to do better. And until then, the buck, at least for me, stops here,” he said.

Acker voiced similar misgivings, but voted in favor. “I am voting for this budget because to do otherwise would be to not give Michigan students the Go Blue Guarantee; the ability of middle class Michiganders to go to school tuition free. I’m voting for this budget because our campuses at Flint and Dearborn deserve the chance to educate their students in those communities,” he said.

During the discussion, Bernstein, Acker and President Santa J. Ono elaborated on their thoughts about recent campus tensions arising over the Israel-Hamas war. (See related story.)

Addressing the budget, White noted she was “very impressed” with the university’s previous cost-containment strategies, and the more than $31 million in cost-containment efforts in this budget. “These efforts ensure that we can operate efficiently, keeping tuition as low as possible,” she said.

Behm noted that 63% of undergraduates receive financial aid, and 31% of U-M’s resident undergraduates pay no tuition. “Of those 63% of our resident undergrads who receive aid, it’s really important to understand that they will not pay any increase in tuition. And that’s one of the things I’m most proud of in this budget,” he said.

Regent Paul Brown said, “This is a great budget, and I will vote for it because it is so, and because we have gotten assurances from the administration that they will do better on those issues cited … by my colleague, Regent Bernstein.”

Tuition and fees

The in-state “sticker price” tuition for undergraduates in Ann Arbor, along with fees, will increase by $508 per year — 2.9% — for an annual rate of $17,736. Tuition and fees for nonresident undergraduate students will increase by $2,874 per year — 4.9% — for an annual rate of $60,946.

The University Health Service fee will increase by 3.9%. This fee is a required component of tuition and supports increasing staff and operational costs.

Tuition and fees are based on full-time enrollment, defined as 12-18 credit hours per term for undergraduate students.

Most graduate programs will see a 4.9% increase in tuition and fees.

Housing rates will increase by 6% — $831 per year— for an annual rate of $14,687 as part of a 10-year plan to enhance the student experience, address maintenance needs and increase capacity and availability of housing.

Financial aid

“Our ambitious vision for the university includes ensuring that our world-class education remains accessible for all Michigan families, regardless of financial means,” McCauley said.

“The average cost for a family with an income of $120,000 or less is lower than it was a decade ago, after adjusting for inflation.”

When it comes to affordability, U-M first-year students receive the second-highest average institutional grant and scholarship amount among Association of American Universities public institutions, according to data reported to the U.S. Department of Education.

Among undergraduates from Michigan, 63% receive financial aid. One in three students — more than 5,000 — will pay no tuition through efforts such as the Go Blue Guarantee, a national model for tuition-guarantee programs that provides free tuition for eligible in‐state undergraduate students with a family income up to $75,000 and family assets less than $75,000.

State support

The FY ’25 budget estimates a 2.5% increase in state funding — which makes up 13% of U-M’s general fund budget — and helps the university to meet its mandatory and inflationary cost increases. The university expects the state budget to be passed later this summer.

Cost containment

Since 2005, the university has reduced general fund costs by more than $550 million, an amount that is approximately 20% of U-M’s total general fund budget.

The new budget includes more than $31 million in cost-containment strategies, such as savings through procurement and travel policy changes, realigning information technology services departments, and other unit adjustments to operations.

The cost reduction allows the university to invest in key priorities like the Vision 2034 impact areas while limiting tuition increases, McCauley said.

Supporting Vision 2034

Highlights of general fund investments to support Vision 2034 include initiatives such as the Learning, Equity, and Problem Solving for the Public Good program at the Marsal Family School of Education’s Marygrove campus, and the U-M Center for Innovation, both of which will further extend undergraduate and graduate programming to southeast Michigan.

U-M will maintain strategies for attracting and retaining faculty and staff with merit programs of approximately 3.5% and additional allocations to employee benefits.

Additional investments in wellness and mental health, recreational and adaptive sports, and public safety on campus will build on existing programs to assure health and well-being for U-M students, faculty and staff.

The new budget will create opportunities for learning, engagement and dialogue to foster a more equitable and civically engaged world through support for anti-bias-focused training and outreach, the recently launched Raoul Wallenberg Institute, the UMICH Votes Coalition, and expanded international partnerships. It also will accelerate U-M’s progress as a leader in sustainability through education, research and practice by advancing efforts to become a carbon-neutral university by 2040.

Other key initiatives include the Climate Futures Lab and the Detroit-based Sustainability Clinic, which will advance creative architectural and urban planning practices to promote climate action and resilience.

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