Lawmaker: U's low out-of-state tuition hurts Minnesota students

Just a few years ago, the University of Minnesota was so eager to attract out-of-state students that it slashed nonresident tuition by a third.

The strategy, which made the U the cheapest school in that category in the Big Ten, paid off. Undergraduates started flocking to the Twin Cities campus from Illinois and California and beyond.

But now, some lawmakers say that the U has been too generous to outsiders, and that it's one reason Minnesota residents are facing a tuition hike this fall. "If they charged an appropriate amount for nonresidents, they'd be able to use that extra revenue to lower the cost of tuition for Minnesota kids," said State Rep. Bob Barrett, a Republican from Lindstrom, who has been pressing the U to change course. Barrett argues that the U, which charged nonresidents just under $21,000 last year, should boost that price by $8,000 to move from the bottom of the Big Ten to the middle. He notes that the U could raise its rates by $5,000 and still be second from the bottom.

Comparable rates at other Big Ten public universities range from $21,990 at the University of Nebraska to $41,906 at the University of Michigan.

At the University of Minnesota, officials agree it makes sense to raise out-of-state tuition, but not as dramatically as Barrett and his allies would like.

"You cannot do that overnight," said Robert McMaster, the vice provost and dean of undergraduate education. He said it would be unethical to foist a huge price hike in one year. "Students have to be able to plan for these increases," he said. "It's not fair to them."

Earlier this month, U President Eric Kaler proposed a 7 percent hike for nonresidents ($1,350 a year), as well as a 1.5 percent increase ($180) for in-state students. The Board of Regents is expected to vote Wednesday on this fall's tuition rates.

Mindful of the criticism, which bubbled up at the Legislature this spring, Kaler also laid out a second option for the regents: a 10 percent increase ($1,930) in nonresident tuition. (The increase would not apply to students from Wisconsin or North and South Dakota, who pay in-state rates.)

Barrett, though, says the problem isn't just that nonresidents continue to get a bargain. It's that, in his view, Minnesota students are subsidizing it.

"The U of M is gouging Minnesota kids," he said, by charging one of the highest in-state rates in the Big Ten. Last year, he noted, tuition and fees for residents topped $13,500, compared to an average $10,200.

"Nowhere else in the Big Ten is there such a discrepancy between the exorbitant rate charged to in-state students … and the inexplicably low tuition rate charged for nonresidents," said Barrett. "I think it's wrong."

Back in 2008, U officials made a conscious decision to try to entice students from other parts of the country. "We very much wanted to move to be more of a national university, a bit less of a regional one," said McMaster. At the time, only about 6 percent of the U's undergraduate students were from outside Minnesota or the nearby "reciprocity" states, where in-state tuition rates apply. And officials were eyeing a shrinking pool of high school graduates in the Upper Midwest.

So that fall, it dropped out-of-state rates from $20,580 to $13,600, and started recruiting aggressively in Chicago and California, among other places.

Since then, the number of out-of-state and international students has more than doubled, McMaster said, while the percentage of Minnesota students has remained unchanged, about 65 percent of the freshman class.

Each year since, the out-of-state tuition rates have climbed, he noted, but only recently to their 2007 high point.

Barrett, meanwhile, said he first raised concerns as a state legislator two years ago, but that out-of-state tuition became a "hot topic" this year, when the U sought funding to extend a tuition freeze for in-state residents.

Barrett, who calls himself "a numbers guy," said he argued that the U could pay for the freeze itself, and even reduce tuition, if it raised the out-of-state tuition by $5,000 or $8,000.

McMaster, though, warns that would simply scare students away. "Let's just pretend we did that," he said. "We would see … a fairly high percentage saying, 'Forget it, I'll stay in my own state, that wasn't part of the deal.' "

The plan, he said, is to increase the rates gradually "over the next five years." He predicts that some of the extra funds will go toward holding down in-state tuition.

Barrett says he's counting on that. "To use some of that extra income to actually lower the rate for a Minnesota kid — to me, that's a win-win for everyone."

Maura Lerner • 612-673-738