University of Minnesota proposal would freeze resident tuition in exchange for extra state funds

The University of Minnesota is offering to freeze tuition for state residents next year in exchange for a $10 million increase in state funding.

Under the plan, the U would forgo preliminary plans to raise the undergraduate tuition rate by up to 2 percent if the Legislature approves the extra money.

The Board of Regents on Thursday endorsed the proposal, which was recommended by President Eric Kaler.

The U drafted the resolution to try to make up for a projected drop in state funding next year.

Last year, the Legislature approved a $32 million increase for the university for the current school year, but reduced that amount by $10 million for 2018-19. Without those funds, the U says that a combination of spending cuts and tuition hikes would be needed to "maintain core operations" next year, according to board documents.

Now, U officials are hoping the Legislature will tap into a projected $329 million state budget surplus to fill that $10 million hole.

The extra money would be used to "hold resident undergraduate tuition rates on all campuses flat" next year, according to the resolution approved by the Board of Regents. The current tuition rate on the Twin Cities campus is $12,800 per year.

In effect, the U is seeking to repeat a deal it struck with state lawmakers in 2012, when it froze in-state tuition for two years in exchange for a bump in state funding. But the Legislature has balked at similar offers since then.

"We will make the case to lawmakers that the budget surplus should benefit Minnesota's future: our state's students," Kaler said in a statement released after the vote.

The board narrowly rejected an alternative proposal, by Regent Michael Hsu, that would have pledged to reduce tuition rates next year in exchange for the new money. But Hsu predicted that the tuition conversation isn't over. "I think we're going to be faced with a tuition battle again in May or June," he said.

Kaler said that the plan approved by the board reflects his ongoing commitment to hold down tuition costs. "Over the past six years, our resident undergraduates have seen the smallest tuition percentage increases in the past 58 years," he said, "an average annual increase of 1 percent on the Twin Cities campus and 0.4 percent on all other campuses."

The tuition freeze would apply to students from neighboring states, such as Wisconsin, with "tuition reciprocity" agreements, but it would not apply to graduate students or other nonresidents.

The regents already have approved a 15 percent increase in the nonresident tuition rate, which will rise to $28,734 for incoming freshmen this fall. Returning nonresidents will see a 5.5 percent hike.

Officials say they're also making plans to reduce spending, and shift internal costs, to balance the budget and cover inflation.

In all, the university received $658.7 million in state funding this year, and is slated to receive $648.7 million next year.

Maura Lerner • 612-673-7384