Minnesota State approves fall tuition freeze; 2021 budget has $58M hole

Minnesota State colleges and universities are freezing tuition this fall as officials face a $58 million hole in the system's 2021 budget.

Trustees for the Minnesota State system on Wednesday approved a fiscal year 2021 operating budget that totals $2.1 billion and includes the tuition freeze. The projected budget gap is more than twice as large as the $28 million hole in the previous year's budget.

Officials are anticipating a systemwide enrollment decline of about 8% over the summer, fall and spring semesters, resulting in a $49 million decrease in tuition revenue.

"Obviously the pandemic has had a significant impact on our students and our institutions," said Bill Maki, the system's vice chancellor for finance and facilities.

Colleges and universities across the country are ­bracing for enrollment declines and budget reductions after the coronavirus shut down campuses this spring and students switched to online learning.

The fall tuition freeze was an addition to the budget aimed at retaining students and luring new ones. Minnesota State campuses will welcome students back this fall with a mix of in-person and online instruction.

Previously, administrators proposed a tuition increase of 3% to take effect in the fall. That hike will now happen in spring 2021.

Minnesota State Chancellor Devinder Malhotra said the fall freeze was a compromise to aid students during the pandemic. Low-income students attending Minnesota State colleges will pay less tuition in the coming academic year because of state and federal grant increases.

"We have to do a balancing act," Malhotra said. "On one end is a strong commitment to affordability, and on the other end we want to make sure that our colleges and universities have the ability to deal with their structural deficits, which have been further magnified by additional costs and loss of revenue due to the pandemic."

Oballa Oballa, president of the college student association LeadMN, said the fall tuition break will provide relief for Minnesota State students during a pandemic that has exacerbated issues such as unemployment, homelessness and food insecurity.

"The struggles added up so fast," said Oballa, a student at Riverland Community College in Austin, Minn.

Colleges and universities will shift money from other funds to help cover the system's budget gap. Schools will still grapple with difficult budget decisions despite a slight increase in revenue from the tuition hike next spring, Maki said.

Trustee Ashlyn Anderson urged system leaders to look for funding sources beyond "the pockets of students and the Legislature." She felt the spring tuition hike was an "insensitive" demand of students during the pandemic. The additional tuition revenue should be used to fund student needs such as mental health services, she said.

System leaders said that without the tuition increase, colleges would have to slash jobs and eliminate low-enrollment, high-cost programs that help support regional economies.

Trustees generally praised the budget during the Wednesday board meeting, calling it a "shared pain plan" that gives students an incentive to return in the fall.

But trustee Robert Hoffman said the system should be ready for "Plan B" if the pandemic worsens.

"The ramifications of what's to come could really be more challenging," Hoffman said.