Michigan State passes budget without tuition hike

Sarah Rahal
The Detroit News

The Michigan State University Board of Trustees unanimously passed the school's 2021 budget Friday without a tuition hike, but foresees cuts to make up for lost revenue during the COVID-19 pandemic.

The board approved tuition and fees for the upcoming year at the same rate as last year. The budget for the university's general fund, including its bioresearch, extension centers and athletics, totals nearly $1.7 billion, a $52.6 million decline from the previous year.

Michigan State University trustees have passed a budget that does not include an increase in tuition or fees for the 2020-21 academic year.

The budget comes on the heels of a $60 million revenue loss due to the suspension of spring and winter sports and increased costs to move fully remote with online teaching, said MSU President Samuel Stanley.

"We see impacts on enrollment, particularly in international students, due to the pandemic and U.S. immigration policies, and probably reductions in state allocations that will even more significantly affect our revenues going forward," he said. "We also see increased costs associated with preparations necessary to prepare the campus for the return of some in-person classes this fall."

Fees for housing and food services will remain the same. That means in-state students will pay $14,524 for tuition and $10,522 for room and board. It is the third consecutive year that tuition has remained frozen.

The budget also includes a 4% increase in financial aid to provide $6.7 million more in student stipends.

To make up for lost revenue, the board is asking every unit of the university to make a 3% reduction in spending. The university has furloughed employees and reduced wages and benefits of others, including leaders of the university, Stanley said.

Michigan State University Board of Trustees meeting held virtually Friday, June 26.

"We're postponing a number of major capital projects, and we're using some of our reserves to close gaps in the budget," he said. "... But getting there has required significant sacrifices in salary and benefits from our faculty and staff and university leaders at a time when they're working harder than ever."

Michigan State anticipates a loss of up to $360 million for the 2021 fiscal year, a shortfall of 11%.

In May, Stanley announced executives at the university will be taking a temporary pay cut between 2% and 7% depending on salary. He cut his pay by 10%.

Several other universities, including Wayne State, Saginaw Valley, Western Michigan and Oakland University, have frozen tuition for the coming academic year, though Eastern Michigan approved a 2.9% hike last week

Wayne State may have to cut its budget by $60 million, while the University of Michigan is bracing for up to $1 billion in losses.

On Thursday, the University of Michigan Board of Rejects rejected the administration's budget with a proposed tuition hike of 1.9% for students enrolled at the Ann Arbor and Dearborn campuses, and a 3.9% hike at the Flint campus. Officials plan to reopen the campuses in less than two months amid the pandemic.

The vote was the first time in recent history that UM's governing board turned down a tuition increase recommended by the administration, and it means the university will not have a budget in place on July 1, the start of its fiscal year. Officials are expected to return with another budget for the board's meeting scheduled for July 16.


Twitter: @SarahRahal_