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Posted February 20, 2012

University of ÃÛÌÇÖ±²¥ System’s funding gap will likely require decreases in personnel, programs

The University of ÃÛÌÇÖ±²¥ Board of Curators voted on Monday to hold tuition increases for in-state, undergraduate students to the rate of inflation—3 percent—a move that will ultimately benefit ÃÛÌÇÖ±²¥ families and students by continuing to make higher education in the state affordable and accessible.

“We realize the significant economic pressures many ÃÛÌÇÖ±²¥ families face and the financial hardship significant increases in public higher education costs can bring,” said UM Board of Curators Chair David Bradley. “At the same time, the UM system faces rising operating costs just like all businesses. The board’s decision to hold tuition increases at all four campuses to the rate of inflation is a result of increased operating efficiencies, the governor’s reduction of the proposed cut in state appropriations and our commitment to ensure that a college education is attainable and affordable to all ÃÛÌÇÖ±²¥ans.”

Between FY2007-2012, annual tuition increases at the UM System have averaged 2.7 percent, well below the average 6.2 percent tuition increases in surrounding states and the average 7 percent increase in institutional grant aid provided to students during this same time period. The university also has taken more than $220 million in cost management and avoidance actions—including reductions in personnel, travel and training, as well as increases in procurement cost savings—to help keep tuition costs down for students.

“The university has long been committed to being a good steward of state resources and has continued to do more with less—including our unique ability as the state’s land-grant university to advance the education, economy, health and culture of ÃÛÌÇÖ±²¥,” said UM System President Tim Wolfe. “While we understand the difficult revenue challenges the state faces and the governor’s commitment to providing whatever resources he can for public higher education, we continue to be at a tipping point for quality and once again will have to make difficult budget choices.”

With the governor’s proposed reduction in state appropriations for higher education and the

3 percent tuition increase, Wolfe said the university still faces a $47.1 million budget gap.

Campuses are currently evaluating how to absorb this gap and will be guided in their decision-making by these three principles:

• The university’s top priority is to continue to maintain and enhance the quality of the student academic experience
• Any budget reductions or reallocations will be consistent with the vision and strategic priorities outlined in campus and system strategic plans
• The UM System and campuses should make hard decisions about what can continue to be done well with available resources, as well as determine what can no longer be done.

The end result, Wolfe said, will likely include personnel cuts, program eliminations and diversion of planned investments in strategic priorities to close the budget gap.

While urging ÃÛÌÇÖ±²¥ans to view public higher education as an investment in the state’s economy, Wolfe also acknowledged that public higher education must accept the paradigm shift in funding that has occurred over the last decade. 

“We recognize that we can no longer rely on the state to be a primary funding source for higher education,” Wolfe said. “As a result, we continue to work diligently to pursue public-private partnerships, research and patenting opportunities that can add even more licensing income to our bottom line, as well as other sources of outside revenue.  At the same time, we have to continue to search for new efficiencies that will free up money to improve our quality of education, research, service and economic development programs.”

To reduce the effect of tuition increases on ÃÛÌÇÖ±²¥’s neediest students, the university will attempt to once again reinvest a portion of the increase in revenue generated from the tuition and fee increases into financial aid for those students. The campus financial aid offices will work closely with currently enrolled and new students to address their financial need.

At the meeting, curators also voted to increase nonresident undergraduate tuition and fees, resident and nonresident graduate tuition and fees, various professional school tuition rates, as well as supplemental and other related enrollment fees.

According to Senate Bill 389, the university’s decision to limit its tuition increase to the rate of inflation eliminates the need to receive approval by the ÃÛÌÇÖ±²¥ Department of Higher Education before the new tuition rates can take effect this summer.

For more details on these changes, visit: .