ANN ARBOR—In its efforts to support access and affordability for the university’s in-state students and families, the University of Michigan Board of Regents approved a budget plan for the Ann Arbor campus Thursday that includes the smallest in-state tuition increase in six years.

The 1.9% increase for in-state tuition and fees is part of an Ann Arbor campus budget that also includes $23 million in additional need-based financial aid.

An 11.2% overall increase in financial aid will mean that most in-state undergraduates receiving need-based grant aid will see no increase in tuition costs in the coming year.

“Our Ann Arbor campus budget again boosts financial aid to ensure that cost will not be a barrier to in-state students who pursue a University of Michigan undergraduate degree,” President Mark Schlissel said. “By investing in academic excellence and our commitment to affordability, we are ensuring that Michigan residents who need it most will see no increase in their tuition cost as they study at a world-class public research university.”

About 42% of Michigan resident undergraduates receive need-based grants, and nearly 26% paid no tuition at all last fall. That included nearly 1,700 students covered under the landmark Go Blue Guarantee, a promise of free tuition for in-state students whose families earn less than $65,000 and have assets totaling less than $50,000. About 70% of in-state students receive some form of aid, which can include need-based grants, scholarships, loans or work-study jobs.

Tuition and fees for in-state students will increase to $15,588 for the most common lower-division rate. That’s $296 more than this year’s costs.

Aside from the in-state aid and tuition changes, the $2.31 billion Ann Arbor campus general fund budget for the fiscal year that starts July 1 contains the following provisions:

• A 3.7% tuition increase for out-of-state undergraduate students that will increase tuition and fees to $51,200, or about $1,850 more than last year, for the most common lower-division rate.
• A 3.2% tuition increase for graduate students that will increase tuition and fees by about $762 for in-state students and $1,526 for out-of-state students for the most common graduate rate.
• A new $500-per-term fee for international students studying in Ann Arbor on F and J type visas to help cover the cost of sustaining and enhancing services to support this important student segment.

The additional grant funding allocated in the budget brings the total funding for need-based undergraduate financial aid, which also includes support for nonresident students, to $228.6 million.

The university has made a commitment to meet the demonstrated financial need for all Michigan resident undergraduates who meet all application deadlines.

The general fund undergraduate financial aid budget has increased 12% per year, on average, over the past decade. This compares to an average annual growth rate of 2.9% for in-state undergraduate tuition and 3.9% for out-of-state tuition. Additional financial aid funding separate from the general fund is provided through donor funding.

General fund revenue includes $1.7 billion from tuition and fees, up 6.1%; indirect cost recovery on research funding of $277.1 million, up 9.4%; and an estimated state appropriation of $325.5 million, up 1.5%.

Unlike in recent years, the FY2020 state appropriation has not been determined as the governor and state legislature continue to work through the state budget process. The state’s next fiscal year begins Oct. 1.

Regents approved the entire FY2020 budget package, which includes the operating budgets for the Ann Arbor, Dearborn and Flint campuses, as well as Michigan Medicine and Michigan Athletics.

As part of their overall budget vote, regents also approved a 4% increase for residence hall room and board rates on the Ann Arbor campus.

Provost highlights key budget priorities

During his general fund budget presentation to the regents, Provost Martin Philbert highlighted planned investments to offer new, innovative programs and ensure student success.

One example of academic and curricular innovation Philbert cited was LSA’s Quantitative Methods and Social Sciences initiative. The program is offering a new undergraduate minor that gives students the chance to leverage U-M’s strengths in data science and social sciences and develop proficiency in data-intensive analysis.

“It is designed to provide students with the capabilities needed to use large and complex data in analyzing and addressing large societal challenges,” Philbert said.

Other investments come in the area of research and discovery, such as Michigan Engineering’s Blue Sky Initiative that supports high-risk, high-reward ideas. One such project is exploring how to manage microbial biomes in city water systems so that scientists can harness their beneficial roles and reduce human health risks.

With $1.55 billion in annual research expenditures, U-M is the top public research university in the nation.

“Henry Tappan, the university’s president from 1852 to 1863, urged the faculty to ‘dare to be in advance of the whole nation if need be’ in carrying out their work,” Philbert said. “Today, we urge them to be in advance of the world, and they are.”

The provost said the budget’s priorities of academic excellence and affordability reflect the institution’s mission as a public research university.

“It enables us to continue our enviable history of investing in pathbreaking research, providing strong educational programs that prepare our students to contribute to the world, and working in multifaceted ways to address complex challenges in Michigan and beyond,” he said.

Measure includes international fee, room and board rate increase

The FY2020 budget incorporates a new assessment of $500 per term for international students studying in Ann Arbor on F and J type visas. The move puts U-M in alignment with a number of institutions that have international fees, tuition differentials for international students, or both.

The university will cover the fee for all Ph.D. students in good academic standing per the terms of their admissions offers. The university will also cover the fee for students appointed as a graduate student instructor or graduate student staff assistant, in accordance with the university’s collective bargaining agreement with the Graduate Employees’ Organization.

Revenue from the fee will help to offset costs associated with external demands, including regulation compliance that has become increasingly more time-consuming and complex, requiring additional staff time and expertise, according to a board action request submitted by Philbert.

“International students are highly valued members of our campus,” Philbert wrote in the request. “They contribute unique perspectives, enrich the culture of the community, and broaden the global focus of the institution. The university therefore places a high priority on providing sufficient services and infrastructure to promote their integration and academic success.”

The 4% increase for residence hall room and board rates will cover essential housing services while supporting future renovations and preserving the significant investments already made in recently renovated buildings. Eight campus residence halls are in need of major upgrades.

The cost per student for a double room with a basic meal plan will total $11,996 for the fall and winter terms, an increase of $462. Need-based grant aid will mitigate this increase for students with financial need.

University Housing is a self-funded auxiliary unit of Student Life within the university.