University of Minnesota plans 15% tuition hike for nonresidents

The University of Minnesota is moving ahead with a 15 percent tuition hike for most out-of-state students despite concerns that it may scare away potential recruits.

The proposal, which would boost the sticker price for nonresidents by more than $3,700 a year, was approved Thursday by a committee of the Board of Regents. The new tuition rate, $28,734 a year, is expected to be finalized by the board Friday.

It would be the second double-digit increase in a row for out-of-state undergraduates, who saw tuition rise by 12.5 percent this fall. The change would not affect Minnesota residents, or those from Wisconsin and the Dakotas, who now pay $12,800 a year at the Twin Cities campus.

"If you look at what a degree costs for [nonresidents] at our peer institutions, ours is lower," said President Eric Kaler, who recommended the increase. "I think this tuition price reflects the value that a University of Minnesota degree can command in the marketplace."

University officials said they would limit the increases for existing students to 5.5 percent a year, while new students would pay the higher rates next fall. The U will wait until spring to set next year's rates for Minnesota residents.

For several years, some regents and state legislators have been calling for a dramatic boost in tuition for nonresidents, arguing that they pay too little while Minnesota residents pay too much. In the Big Ten Conference, only one school (the University of Nebraska) charges out-of-state students less than the University of Minnesota. The average nonresident rate is $32,600 a year, according to data compiled by the University of Wisconsin.

Last year, the regents set a five-year goal of raising the U's nonresident rate to the midpoint of the Big Ten — an estimated $35,000 a year by 2021. Under the new plan, however, it could reach that number by the fall of 2019.

But a number of regents and student groups have raised concerns that such steep hikes would unfairly burden many families and undermine efforts to recruit top students from other states.

"It concerns me that they may not apply if they see a very high sticker price," said Regent Linda Cohen, who voted against the proposal. "I would much prefer a more measured approach, perhaps 10 percent."

Most of the board members, however, sided with Kaler, who said the U should price itself closer to its competitors. "I do not believe that the value of a degree from the University of Minnesota is any less than the value of our peer institutions," Kaler said. "We're going to have to make this jump. I think it's time to pull the Band-Aid and do this."

Nikil Badey, a 19-year-old freshman from Chicago, called the vote disheartening. The U's relatively low tuition, he said, "was a very big part of why I came here."

Isaiah Ogren, an 18-year-old freshman from Dallas, said he was particularly troubled that the regents were "obsessing about being at the bottom of the Big Ten." As an economics major, he said, he would argue that the lower price gives the U a competitive edge in recruiting the best students. "But I don't think we can do that if we take the attitude that our quality is indicated by the tuition we charge," he said.

The university acknowledged that applications from out of state have dropped in the face of recent tuition hikes, and that they've had to increase spending on recruitment and scholarships to ensure a steady stream of students. At the same time, the U projects that the new tuition rates will bring in an additional $8 million a year.

Regent Steve Sviggum, who supported the increase, said the extra funds could help plug some gaps in the university's budget and ease pressure to raise tuition on Minnesota residents. Without more money from out-of-state students, he said, "we will get it from Minnesota students or from Minnesota taxpayers, one or the other."

Since 2011, out-of-state tuition has grown by 50 percent, from $16,650 to $24,946 a year, for undergraduates on the Twin Cities campus. In the past three years, the rate has jumped between 7 and 12.5 percent a year.