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UM approves budget, including tuition hike, for 2021

Kim Kozlowski
The Detroit News

Correction: A previous version of this story incorrectly broke down the allocation of state appropriations for the University of Michigan Dearborn.

University of Michigan Board of Regents on Monday approved a 2020-21 budget plan that includes a 1.9% tuition increase for students in Ann Arbor with financial aid that officials say will offset the cost for students in need as the pandemic reshapes priorities. 

Regents also approved a 1.9% tuition hike for students enrolled in UM-Dearborn, or $124 more per semester for in-state undergraduates, and a 3.9% tuition hike for UM-Flint students, which is an additional $243 per term increase for undergraduates.

The new rates mean that tuition for Ann Arbor students in the most common lower-division rate will increase by $290, for an annual rate of $15,520 for in-state students, and by $966, for an annual rate of $51,838 for nonresident students.

During the special meeting Monday evening, UM President Mark Schlissel saidthe budget for the Ann Arbor campus includes more than $400 million from the university’s endowment, with $12.8 million in financial aid for undergraduates at the Ann Arbor campus for students coming from families in need, which will cover the entire cost of the increase for in-state students.

Schlissel said that the financial aid office is ready to adjust or grant new aid to families whose circumstances have changed because of the COVID-19 pandemic. The university said it would tap into its reserves to meet the need if it exceeds the budgeted amount, he said.

“We are committed to do our very best to make sure that the COVID-19 pandemic does not result in a lost generation of students who were unable to continue or complete their Michigan educations because of the circumstances we all find ourselves in,” Schlissel said.

The $2.3 billion general fund budget for the fiscal year that starts July 1 in Ann Arbor is based on the new tuition rate, $102 million in cost containment and an estimated state appropriation of $325.5 million, the same amount as this year, university officials said.

Most graduate programs also will see a 1.9% tuition increase.

The new general fund budget also includes a temporary $50-per-term COVID-19 fee to cover costs of testing and other services associated with the pandemic.

It also includes a 1.9% increase in the University Health Service Fee to $202.39 for each student per semester and a 1.9% increase for residence hall room and board rates for next year.

UM-Dearborn's $158.3 million operating budget includes a 11.8% increase in existing financial aid programs. With this increase, nearly 90 percent of the university’s state appropriation will go directly to students via financial aid, officials said.

Campus officials have restructured its tuition and fees in a "block tuition" program that will allow students to take 12 or more credit hours without paying additional tuition.

Meanwhile in Flint, the general fund budget is $113.6 million. It will eliminate the online credit fee of $46 per credit for the upcoming academic year due to the majority of courses to be offered online as a result of the pandemic. 

The budget approval comes four days after the regents deadlocked 4-4 in an earlier vote. It was the first time in recent memory that UM did not approve a budget.

Many of the regents opposed the budget due to the tuition hike during the pandemic, which shut down public life for weeks and thrust scores of families into unemployment lines and pushed some businesses to the brink.

The budget also includes doubling the amount of money for UM Dearborn and Flintfor student recruitment, retention and graduation, from $10 million to $20 million. Many have been lobbying the university to hike support for the university's two satellite campuses.

Those voting against the budget included Regents Denise Ilitich and Shauna Ryder Diggs. Regent Katherine E. White was unable to attend.

Ilitch on Monday said she remained steadfast that increasing tuition at this time is "dead wrong," a position she took at the last meeting, when the spending plan was rejected.

"The sacrifices made routinely by our students and families are not commensurate with the sacrifices made by the university," Ilitch said, adding the students and families make more sacrifices.

She noted multiple levers the university can pull, including the university's $12 billion endowment, university reserves and a $1 billion line of credit the university recently reserved for general operating purposes in the event of a financial emergency.

She read two letters from parents who said they were struggling and asked Ilitch to oppose a tuition increase.

"My greatest fear is my daughter will not be able to complete her degree if tuition increases," said Ilitch, reading from one of the letters.

Added Diggs: "This period in our history is not the time for a tuition increase."