Most in-state undergraduates at the University of Michigan will see no increase in out-of-pocket tuition expenses this fall with approval June 16 of the university’s budget for the coming year.
The 2022-23 fiscal year general fund spending plan also provides funding to expand the Ann Arbor campus’ $15-per-hour minimum wage to temporary and student employees, and supports merit programs for faculty and staff “to maintain a competitive edge in a challenging hiring environment,” Provost Laurie McCauley said.
RELATED BUDGET STORIES
The general fund budget for the Ann Arbor campus is part of an approved universitywide consolidated 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 B. Acker, Michael J. Behm, Mark J. Bernstein, Paul W. Brown, Sarah Hubbard, Ron Weiser and Katherine E. White voting yes, and Regent Denise Ilitch voting no. All budgets take effect July 1.
“Through this budget, we see reflected our long-standing priorities of academic excellence and affordability partnered with our dedication to uphold the value of a U-M education,” McCauley said in her presentation to the Board of Regents.
“This requires strategic investments to support our people, to preserve and advance the excellence of our academic programs, and to provide need-based financial aid. It was developed with careful input, guidance, and counsel from many across campus, including our board members.”
Under the new spending plan, the in-state undergraduate rate of tuition and fees in Ann Arbor will increase by 3.4% but will be offset by a 5% increase in financial aid — or about $12.8 million more than this year. The increased aid completely covers the tuition increase for most in-state undergraduate students.
About one-in-four undergraduates from Michigan — more than 4,000 students — will pay no tuition at all because of financial aid.
“It’s important to notice that for the last decade, our budget includes enough additional financial aid dollars each year so that most undergraduates from the state of Michigan will see no increase in out-of-pocket tuition costs,” Behm said. “This includes more than 90% of students from families who earn less than $125,000 in annual income. I think that’s quite an accomplishment.”
President Mary Sue Coleman said that the annual budget not only represents every facet of the university’s operations, but also its “priorities and values as an institution.”
These priorities include investing in academic and research programs, providing additional resources for student engagement and well-being, offering compensation programs that attract and retain talented employees and increasing support for students on all three campuses, Coleman said.
The in-state “sticker price” tuition for the most common lower-division undergraduate rate, along with fees, will increase by $558, for an annual rate of $16,736. Tuition and fees will increase by $2,102 — 3.9% — for nonresident students, for an annual rate of $55,334.
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 3.9% increase in tuition and fees.
As part of the increase in tuition and fees, students will see a 2.2% increase in the University Health Service fee to $209.80 per semester and a $2 increase in the Central Student Government fee to $11.19 per semester.
As part of a presentation in which she described the university’s “commitment to our people” as the cornerstone of this year’s budget, McCauley also highlighted the need to attract and retain a top workforce through competitive and equitable salary and benefits.
Measures for the upcoming fiscal year include increasing the minimum wage to $15 per hour for all employees, expanding merit pay programs for faculty and staff, and funding initiatives in culture change and organizational learning.
“The $15 minimum wage is a really important milestone for our university,” said Acker, the board chair. “I look forward to continuing to pay a fair and living wage to our employees.”
Brown said he was also happy to support the expansion of the $15 minimum wage, as well as a budget that supports low- and middle-income families. “This budget, again, makes a huge impact in providing the resources that those families that find themselves in those circumstances, the support they need to make sure that every student, especially in-state students, can come to the University of Michigan,” he said.
The budget also provides for:
- Strategic investments to promote academic excellence, such as the creation of a new degree program in the College of Engineering’s recently launched Department of Robotics.
- Supporting student engagement and well-being, including by providing resources to sustain access to counseling and psychiatric services, and increasing access to mental health “first aid” training, which equips faculty, staff and students with more tools to identify and help students who are struggling.
- Continued funding for key university financial aid programs like the Go Blue Guarantee on all three campuses and the Wolverine Pathways college-prep program.
McCauley also highlighted cost-containment efforts expected to generate roughly $30 million in ongoing savings, including reducing the use of lease space, conducting more recruiting and professional development activities remotely and reorganizing administrative and maintenance functions.
“This budget reflects the collective commitment of faculty, staff and leadership across the university, at all levels,” McCauley said. “This budget protects the value of a U-M degree through a combined commitment to academic excellence, affordability, and financial stewardship.”
Hubbard lauded the cost-containment efforts as “incredibly important to the university” in describing her support for the budget. “I really do appreciate the efforts to save $30 million out of the budget and keeping this tuition increase well below our projected rate of inflation,” she said.
Ilitch, who voted against the budget measure, said U-M has raised tuition on U-M students and families for the last 38 years and “limited opportunities for middle and working-class students to take advantage of a Michigan education.”
“This business model is not sustainable,” Ilitch said. “So I am going to encourage us to consider change. We are an extremely financially strong institution, so we’re blessed with a lot of financial flexibility. That flexibility gives us the awesome ability to look at our financial situation through multiple lenses.”
The budget plan estimates a 3% increase in state appropriations, which is approximately the mid-point of current budget proposals put forth by the governor, state Senate and state House of Representatives. The state, which operates on a different fiscal calendar, must approve its budget by the end of September.
Housing rate increases to cover maintenance
Regents also approved a 4.6% increase for residence hall room and board rates for the upcoming fiscal year. The increase will support future upgrades and maintenance in the residence halls, including improvements to security, Wi-Fi, and student room amenities, and help meet the rising cost of food.
The cost per student for a double room with a basic meal plan will total $13,170 for the fall and winter terms, an increase of $72 per month. Need-based grant aid will mitigate this increase for students with financial need.
Michigan Housing is a self-funded auxiliary unit of Student Life within the university.
— Ann Zaniewski of Public Affairs contributed to this article.