<p>The University of Michigan will increase in-state tuition 1.6 percent and hike out-of-state tuition 3.4 percent next year.
The increase brings in-state tuition to $13,158 and out-of-state tuition to $41,578, one of the highest non-resident rates of any U.S. public university.
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Regents also approved a 2.5 percent increase in the cost of housing and a $1.79 billion general fund budget.
The resident tuition increase is well below the 3.2 percent cap set by the State Legislature in order for U-M to receive full state funding, which this year will be roughly $295 million, a near $16 million increase over last year.
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The tuition increase is coupled with student fee increases of $134 per year, including a $65 per term fee that will support gym and union renovations and a $4 increase in the Central Student Government fee.
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Operating budget
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Some of the general fund increase will go toward hiring at least 60 new faculty within a two-year period. The goal, according to Pollack, is to decrease class sizes for undergraduates. The program is expected to cost about $6 million.
U-M's entire budget — including health system, athletic department budget, auxiliary funds and general fund — is $6.95 billion.
Housing
The 2.5 percent increase in housing rates is identical to last year's hike. A bed in a double room with a basic meal plan will cost $10,246 a year.
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U-M launched the Residential Life Initiative in the mid-2000s, and since then U-M has poured more than $550 million into improving its existing student housing facilities, $75 million in the residential life portion of North Quad, which opened in 2010, and $185 million toward a dorm for graduate students, which is under construction.
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Kellie Woodhouse covers higher education for the Ann Arbor News. Reach her <a href="mailto:atkelliewoodhouse@mlive.com">atkelliewoodhouse@mlive.com</a> and follow her on twitter.</p>
<p>Additional material from the Michigan site:</p>
<p>ANN ARBOR—The University of Michigan puts a major emphasis on college affordability and academic excellence with the Fiscal Year 2015 General Fund budget that was approved today by the Board of Regents.</p>
<p>The budget leverages the state’s investment in higher education and the university’s ongoing cost-containment efforts to enhance academic excellence. The budget has been designed to improve student access through significant additional investments in financial aid and holding the increase for in-state undergraduate tuition to less than the rate of inflation.</p>
<p>“A significant boost in financial aid coupled with a small tuition increase will help us keep the world-class education offered on this campus accessible to all qualified students,” said U-M President Mary Sue Coleman.</p>
<p>The budget includes a $19.5 million increase in undergraduate financial aid—enough to lower the loan burden by $1,000 a year for in-state undergraduates with financial need from middle-income families. The budget also provides for strategic investments in new academic initiatives and the hiring of 60-80 additional faculty members to reduce class sizes.</p>
<p>Undergraduate tuition for in-state students will increase by $210 for the academic year, or 1.6 percent. Out-of-state undergraduate tuition will increase 3.4 percent. Both increases are for students paying the most common lower-division tuition. Tuition for most graduate programs will increase 2.4 percent.</p>
<p>“We have maintained our focus on the budgeting priorities of academic excellence, affordability and access and fiscal discipline,” said Provost Martha Pollack, the university’s chief academic and chief budget officer.</p>
<p>“This approach means that for a sixth straight year there will be no increase in the net cost of attendance for most students with need. We think that is incredibly important for our students.”</p>
<p>Across all family income bands up to approximately $140,000 a year, financial aid will increase enough to cover the full increase in the cost of attendance for most students with need. The budget also boosts financial aid for out-of-state students, more than doubling the number of out-of-state students receiving aid packages that cover the full demonstrated need.</p>
<p>Student costs will increase another 1 percent to cover a recommended $4-per-year increase in the fee that supports Central Student Government activities and a new $130-per-year fee that will fund improvements in the university unions and recreational sports facilities. This new fee, widely supported by students, was approved by the Board of Regents in April 2013. In total, tuition and required fees will increase $344 per year, or 2.6 percent, for in-state students paying the most common lower-division rate.</p>
<p>The budget extends the university’s decade-long commitment to cost containment by trimming an additional $24 million in recurring expenses from the General Fund through a continued focus on operational efficiency, cost containment and seeking alternative sources of revenue. Since 2004, $289 million in recurring expenses has been trimmed from the General Fund, allowing resources to be reallocated to higher priorities and constraining tuition increases.</p>
<p>Pollack says that by working with the schools and colleges throughout the budgeting process, the university has identified a number of efforts that will enhance the academic experience for students. Those initiatives will be funded primarily through the reallocation of existing resources by asking the schools and colleges to identify cuts that can offset new initiatives. These investments fall into four general categories of new academic programs, enhancement of the student experience, initiatives to improve diversity and expansion of international opportunities.</p>
<p>Revenue to the General Fund comes from three main sources: tuition, state appropriation and indirect cost recovery on sponsored research. Indirect cost recovery pays specifically for the indirect costs of research, making this funding not available for allocation on a discretionary basis. This leaves tuition dollars and the state appropriation as the primary General Fund revenue sources that can be flexibly allocated. State funding is expected to increase 5.8 percent this year.</p>
<p>The budgeted increase in tuition and fee revenue reflects changes in enrollment plus the effect of the tuition rate increases and a slight projected increase in the proportion of out-of-state students. The incremental revenue associated with the university unions and recreational sports facility improvement fee also is included. These revenue increases, coupled with cost-cutting efforts totaling $24 million, make up the overall General Fund budget of $1.8 billion.</p>
<p>Residence hall rates</p>
<p>Separately, the Board of Regents approved a 2.5 percent increase in residence hall and undergraduate apartment room-and-board rates for 2014-15. That rate includes 0.5 percent to partially offset projected operating cost increases and 2 percent to continue funding major renovations of housing facilities, such as the renovation of West Quad that began in May and the improvements at South Quad that will be completed in August.</p>
<p>The cost per student for a double room with a basic meal plan will total $10,246 for the fall and winter terms, an increase of $250. Rental rates in Northwood Community Apartments IV and V for graduates and students with families will increase by an average of 0.5 percent.</p>
<p>University Housing is a self-funded auxiliary unit of the university. The rate increases reflect adjustments for projected expenses, after planned reductions in operating costs. Offsetting a forecast increase of $2.6 million in employee costs, food supplies and inflation, University Housing is reducing other operating expenses by an estimated $2.2 million for fiscal year 2015. Since 2006, University Housing has reduced costs by $15.3 million to help minimize increases in room and board rates over the years.</p>
<p>"$41,578, one of the highest non-resident rates of any U.S. public university."</p>
<p>It only makes sense.</p>