University of Minnesota looks at 15% tuition hike for out-of-state students

Tuition for many out-of-state University of Minnesota students would rise 15 percent next year under a proposal outlined Thursday by President Eric Kaler, who has been under pressure to raise those rates.

While regents voiced cautious support for the plan, some said they worry a steep increase might undo gains the U has made in recruiting students from across the country.

A 15 percent hike for each of the next two academic years would place the U in the middle of the pack among its peer schools. The university now ranks next to last for nonresident tuition in the Big Ten and seventh out of 14 peer institutions for in-state tuition.

That disparity has prompted charges from some lawmakers that Minnesota taxpayers are subsidizing the education of students from other states.

The U lowered tuition rates for nonresident students in 2007 to widen its nationwide appeal. But in recent years, those rates have risen much more steeply than tuition for in-state undergraduates and those from areas with reciprocity deals (Wisconsin, the Dakotas and Manitoba).

U officials acknowledged that a couple of years of those marked increases have taken a toll: For the fall of 2016, nonresident applications stayed stable but enrollments dropped. For this fall, applications were down, and the university made a spring recruitment push sweetened with additional scholarships to offset that, even as it raised nonresident tuition by 12.5 percent.

"We best be careful because at some point in time, we'll say, 'Where did [the out-of-state students] go? What happened with them?' " said Regent Dean Johnson.

Kaler has not yet spelled out his recommendation for resident tuition next academic year, but he said he wanted to set nonresident tuition sooner than usual so those families can plan ahead.

Supporters of increasing nonresident tuition at the U have argued for years that those rates need to be brought closer in line with tuition for Minnesota students. They say the low ranking in comparison with other Big Ten schools send a message that cheapens the value of education at the U.

On Thursday, U Senior Vice President Brian Burnett called the disparity "an equity challenge and a challenge for us politically as well."

Kaler voiced confidence that the U's quality will continue to attract students from across the country. The Legislature approved $54.6 million in new funding for the U over the next two years this spring, far short of the university's request, and that made the increase necessary, Kaler said.

Nonresident sophomores and juniors would see a tuition increase of no more than 5.5 percent. But the U made no such promise to this fall's freshman class, and officials said they would have to decide whether the full increase would apply to them.

The university estimates the proposed 15 percent increase will bring in $10 million more in revenue. Officials said they tentatively plan to spend $1.5 million of it to boost out-of-state recruiting.

A number of regents said they have some concerns about the proposal though none signaled outright opposition. They said out-of-state students increase diversity on campus and bring perspectives that enrich the experience of Minnesota students. Others said that with a looming shortage of workers in the state, the U plays a key role in attracting young people who will stick around.

"We need to import some talent," said Regent David McMillan. "As we raise that price, we need to watch that we are not affecting that input."

In contrast, Regent Darrin Rosha said he would have been comfortable with the full 30 percent jump for next fall.

"I wouldn't be taking this position if I thought there would be a cataclysmic drop in students from other areas," he said, adding, "This rate does affect the way the world perceives our quality."

Apoorva Malarvannan, a student representative on the board, said she was "deeply uncomfortable" with the proposed increase. For nonresident students she spoke with, affordable tuition was a major factor in drawing them to the U.

Max Hurst, a junior from Aurora, Ill., and leader with the Minnesota Student Association, echoed that sentiment. He said the university wasn't on his radar until he received an application in the mail. He didn't begin to seriously consider the school until after he was accepted and started comparing the price of attending to that at other colleges.

A political science major, Hurst said he now plans to stay in Minnesota after graduation, thanks to connections he made on campus and an internship at the governor's office.

"The University of Minnesota is a great institution," he said. "But it's not as well-known and its brand doesn't carry as far as the administration and the regents believe."

George Abdallah, a sophomore from Orange County, Calif., said even the prospect of the smaller, 5.5 percent increase for upperclassmen next year has led him to decide to skip planned trips home for Thanksgiving and Christmas and save the money. He said the annual tuition increases for out-of-state students undercut the university leadership's statements that they want to make the U more diverse.

Amal Mohamed, a junior from St. Paul majoring in microbiology, says she understands that the idea behind increasing nonresident tuition is to ward off painful tuition increases for local students like her. But she says that without a clear breakdown of how the extra revenue will be spent to benefit students, that rationale can seem a bit abstract.

"It's nice for us, I guess," she said. "But I worry it will hinder a lot of out-of-state students from coming. That's what draws a lot of students to the U — that we are on the lower end."

mila.koumpilova@startribune.com 612-673-4781