University of Michigan hikes tuition, housing costs to nearly $30,000 annually
University of Michigan regents approved increases in tuition and room and board Thursday that pushed the annual cost for a full-time, in-state undergraduate student living on the Ann Arbor campus to nearly $30,000.
The 3.4% tuition hike that brings annual costs to $16,736, up from $16,178 in 2021-22, drew criticism from one regent who noted the university's 38th consecutive annual tuition increase and said the school's business model is not sustainable.
Regent Denise Ilitch was the lone no in a 7-1 decision to approve the Ann Arbor campus's $2.59 billion operating budget for 2022-23.
"This continual increasing has limited opportunities for middle- and working-class students, some would say being 'squeezed,' to take advantage of a Michigan education and impact the economic diversity of the student body at a time of increasing hardship," Ilitch said. "We have been told over and over this business model ... must change."
Interim President Mary Sue Coleman said one in four in-state undergraduate students on the Ann Arbor campus — more than 4,000 students — won't pay tuition and the majority will not see an increase in what they pay for tuition due to need-based financial aid, which officials say will increase 5%, or about $12.8 million, more than last school year.
"The rate increase for those who can afford it will allow us to continue offering the critical financial aid programs that ensure that the university is accessible to all," Coleman said.
Annual housing rates for students living in a double room with a basic meal plan rose 4.6% to $13,171, up from $12,592 in 2021-22. UM said the increase would be used for future maintenance and upgrades to residence halls such as security, Wi-Fi and room amenities, and would help offset rising food costs.
Tuition and fees for full-time out-of-state students rose 3.9%, or by $2,102, to $55,334. UM defines a full-time undergraduate student as someone taking 1218 credit hours per term.
Coleman said UM's investment in financial aid is a reason why Money magazine recently ranked UM as the top university in the nation for value among 600 institutions it ranked for the magazine's 2022 list of "Best Colleges in America."
Provost Laurie McCauley said the budget balances investments in academic excellence and affordability. She pointed out that 61% of in-state students pay less than full tuition. The budget also continues funding for programs such as the Go Blue Guarantee, which offers four years of free undergraduate tuition to qualified, in-state students from Michigan families earning $65,000 annually or less.
"UM's focus on access and affordability is unwavering," said McCauley. "Our financial aid commitments ensure that a UM degree remains in reach for all families in Michigan."
Ilitch said her no vote was made with students who need to work multiple jobs or work full-time and live at home with their parents in mind, and for parents who are out of work or have had to refinance their home to pay to send their child to UM.
UM's model of raising tuition every year is not sustainable and said an Association of American Universities survey showed that people are losing confidence in a college education's value because of cost, she said.
"We are an extremely financially strong institution," Ilitch said.
She said UM must find new revenue sources to fund tuition, identify inefficiencies at every level and reduce costs by centralizing administrative expenses.
"If we were as good at raising revenue streams as we are at raising tuition, our students would be far better off," said Ilitch. "We need to be creative, innovative and tighten our belts. ... We must set this as a top priority and be relentless about it."
Regent Michael Behm said it was important to note the financial aid in the budget.
"For the last decade, our budget includes enough additional financial aid dollars so that most undergraduates from the state of Michigan will see no increase in out-of-pocket tuition costs," said Behm. "This includes more than 90% of students from families who earn less than $125,000 in annual income. I think that's quite an accomplishment that needs to be pointed out."
The budget includes a $15 an hour minimum wage for temporary and student employees. Last year, UM set a $15 minimum wage for permanent workers.
Regent Paul Brown, who will become board chair starting with the July regents meeting, said he is not a "tuition hawk" but an "affordability hawk" and UM's tuition is a "progressive system."
"That really goes to the affordability issue," said Brown. "This budget is allowing us ... $15 minimum wage for all of the employees at the University of Michigan. As in many things, the University of Michigan will be a leader in this in our society."
Brown also said UM has done a great job for families with lower incomes but many often call attention to middle-class families getting hit by costs.
Regent Sarah Hubbard, who will become vice chair in July, said fiscal responsibility is "incredibly important to the university" and she said she appreciates the efforts to keep the tuition increase well below the projected rate of inflation.
"It is a significant accomplishment, hopefully, one we can continue to do and have done for the last three years," said Hubbard.
Meanwhile, Regent Jordan Acker called the $15 minimum wage increase "a really important milestone for our university. I look forward to continuing to pay a fair and living wage to our employees."
The board approved a $165.4 million general fund operating budget for UM-Dearborn. That budget includes a tuition and fee increase of 3.6% for undergraduates. In-state freshmen and sophomores will see tuition rise to $7,160 in 2022-23, up from $6,908 last school year.
The board also approved a $116.5 million general fund budget for UM-Flint that includes a tuition and fee increase of 4.9% for undergraduate students, meaning In-state freshmen and sophomores will pay $6,762 in 2022-23, up from $6,446 in 2021-22.
Michigan State University and Wayne State University set their tuition next Friday.