More and more, state shifts higher-ed costs to students

Gov. Tim Pawlenty said it didn’t have to happen.

Higher education leaders said it was inevitable given the battering their budgets took at the state Capitol this year.

Both sides will point fingers.

One way or another, though, tuition is increasing yet again as Minnesota pulls back taxpayer support for higher education and shifts ever more of the costs to students.

Tuition is on track to increase this fall at the University of Minnesota and the 32 institutions in the Minnesota State Colleges and Universities System (MnSCU).

Thanks to federal stimulus money, students will get a temporary reprieve this fall, capping the increases at about 3 percent. In fact, thousands could see tuition drop.

But Minnesota should not fool itself. The tuition trajectory that started rising early in this decade is heading ever higher. Tuition has doubled since 1999 at the U of M. And this fall, for the first time in Minnesota history, the University will draw less in state support than it collects in tuition.

As the state budget stands now, the U of M’s funding for the coming academic year will be rolled back to the levels of 2002 without adjusting for inflation, said Richard Pfutzenreuter, university vice president and CEO. Further cuts Pawlenty is poised to make would roll it back to 1999 levels.

The university is cutting 1,200 positions and slashing spending where it can, Pfutzenreuter said.

Still, if not for the stimulus money, tuition would have gone up by 7.5 percent, he said. That’s the true increase students face in 2012 and beyond, after the stimulus money is gone.

The bottom line is that the price for education at a public university or college in Minnesota is climbing again, leaving most students with little choice over the long term but to load on the debt if they want a degree.

Keep in mind that debt loads already are the sixth highest in the nation for students graduating from a Minnesota state university.

These also come as displaced workers of all ages are looking to colleges and universities for new skills. After the state lost nearly 75,000 jobs in 2008, enrollment jumped 14 percent this January in the MnSCU system. And that reflected only the first wave of layoff notices.

Shifting the recession pain
U of M officials said Tuesday that this latest increase was driven by a 7.4 percent reduction in state funding and by the expectation that Pawlenty will cut the university’s state appropriation further when he balances the budget on his own by “unalloting” funding the Legislature had approved this year.

Last month Pawlenty vetoed a bill that would have raised money for education and health care by raising taxes on alcohol, some credit card companies and households making more than $250,000 a year. Now he proposes to balance the budget on his own by means of the rarely used unallotment process. Under state law, Pawlenty must wait until July to actually begin the process, but he has signaled that higher education will be one of his targets.

Minnesota students are not alone in seeing state budget woes reflected on their tuition bills.

Florida’s state universities are seeking 15 percent tuition increases, the Miami Herald reported. Kansas is contemplating tuition increases after that state’s legislature cut higher education budgets by 10 percent, according to the Kansas City Star.

Governors and legislatures in some states are trying to protect higher education from heavy budget blows, said Brian Sigritz, a staff associate at the National Association of State Budget Officers.

But political rhetoric notwithstanding, higher education is a tempting target because elected officials know these institutions have the option of passing the fiscal pain to students.

“No one likes to see that happen, but these public institutions are among the few state agencies that have the ability to do it,” Sigritz said.

The details
Here are the details of the proposed Minnesota tuition hikes from press releases issued by the U of M and MnSCU:

At the U of M, the increase in undergraduate tuition will be capped this coming academic year at $300 (about 3.125 percent) and next year at $450, under a budget President Robert Bruininks is scheduled to propose to the Board of Regents on Friday.

Had the U not received the federal stimulus of $89.3 million, the increase would have been 7.5 percent for a typical tuition hike of $720. That’s what non-resident students will pay.

Part of the stimulus was used to buy down tuition to the caps. Another part will go to create a new middle-income scholarship program, intended to pick up where Pell Grants for low-income students leave off. With the new scholarships, tuition actually will drop for students from families earning $40,000 to $100,000 a year.

In all 60 percent of the Minnesota resident students could see tuition drop this year. But the drops would be temporary unless the state finds a way to pick up the difference after the stimulus is spent.

“Despite a significant cut in state appropriation, we’ve shaped a budget that minimizes this year’s tuition increase for Minnesota residents,” said Bruininks. “In fact, most Minnesota students can expect to pay substantially less to attend the University next year. This is not to say there are not major budget challenges ahead of us, but this is a responsible budget that is mindful of the economic times in which we live.”

The regents have scheduled a meeting for June 24 to act on Bruininks’ proposed budget.

Meanwhile, MnSCU would increase tuition by 2.8 percent at the 25 state colleges and 3 percent at the seven state universities, under a budget Chancellor James H. McCormick is recommending to the system’s Board of Trustees. 

The increase would amount to $114 per student at two-year colleges, bringing their average tuition to $4,194. At the state universities, students would pay an additional $169, bringing their total average to $5,791.

The proposed undergraduate tuition rate includes a one-time discount from federal stimulus funds, lowering tuition by an average of $88 across the system.

“We are grateful that the stimulus money helps us hold down the increase for this fall,” Chancellor James H. McCormick said. “In these uncertain economic times, many students and their families are challenged to make ends meet. But we also know higher education is key to retraining laid-off workers and preparing students to succeed in today’s global marketplace.”

The MnSCU board will hold a public hearing on the proposed budget and tuition increases from 1 p.m. to 3 p.m. June 17 at the system office in St. Paul. The trustees are expected to act on the proposed budget at their July board meeting.

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Comments (6)

  1. Submitted by John Olson on 06/10/2009 - 12:31 pm.

    If this trend continues (and it seems it will), at what point does the discussion begin about reducing the number of campuses?

  2. Submitted by Bill Gleason on 06/10/2009 - 12:54 pm.

    Actually, we recently started a new campus in Rochester. Whether it is actually new is a semantic matter. The fact is that we were first told that no bricks and mortar would be involved, and that has apparently changed. A close inspection of the situation might lead to the conclusion that the expansion was political. But that couldn’t happen in Minnesota… Could it?

  3. Submitted by John Olson on 06/10/2009 - 02:16 pm.

    Bill, your point is well-taken. To me, Rochester makes sense for the U of M because of the relationship and proximity to Mayo.

    I was thinking more along the lines of places such as U of M Morris and U of M Crookston relative to whether or not they should be maintained. Also, does MnSCU really need facilities in both Virginia and Eveleth? And Grand Rapids? And Hibbing? Just wondering….

  4. Submitted by Bill Gleason on 06/10/2009 - 03:07 pm.

    Thanks for your comment, John.

    You’ll no doubt hear a lot from people whose ox you have gored.

    I, for one, would never support doing away with Morris. It is one of the best institutions – of its type – in the state.

    Best,

    Bill

  5. Submitted by Bernice Vetsch on 06/10/2009 - 03:26 pm.

    Pawlenty is right about ONE thing: “This didn’t have to happen.”

    And he is the person who could have prevented it by reversing the 1999-2000 tax cuts for the wealthy, thus returning $1 billion per year in revenue to our state. Voila. It didn’t have to happen.

  6. Submitted by Henry Wolff on 06/10/2009 - 06:31 pm.

    The reason that tuition for college has spiraled out of control is because of all the public subsidies. There is now pressure back from students. Whatever they can borrow or pay for in grants they will pay for college. They come out with massive loans that make no economic sense. We need to look at the cost side of education. The rate of inflation in education is out of control.

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