MSU implements 2.5 percent tuition hike, less than originally approved

Contact: Terry Denbow, University Relations, Office: (517) 432-1196, Terry.Denbow@ur.msu.edu

Jun 18, 2010

DETROIT -- The average student at Michigan State University will see a tuition increase for the 2010-11 academic year of 2.5 percent, or approximately $273, a rate lower than the approved 4.9 percent the university announced in last year's budget guidelines.

At its meeting today in Detroit, the MSU Board of Trustees also approved another 10 percent increase in financial aid for 2011-2012. That increase, coupled with those approved by the board over the past five years, results in a dramatic 67 percent total increase in aid available.

As it did last year, the MSU board approved a two-year budget framework—2010-11 Budget Development Guidelines and 2011-12 Preliminary General Fund Budget Guidelines.

Under these guidelines, the average undergraduate tuition for 2010-11 will increase by 2.5 percent. Tuition for other regular students, such as graduate students and nonresidents, will be increased by about 5 percent.

Further budget highlights include a reduction in campus health care costs by 10 percent, as well as all faculty and collective- bargaining employees forgoing salary increases this year.

"We are proud of the way that the MSU community is working together to build value for students and stakeholders in Michigan and around the world," said MSU President Lou Anna K. Simon. "As a response to these difficult economic times, all employee groups have demonstrated support by forgoing salary increases for a year."

Guidelines for the two-year period are based upon an estimated 13 percent reduction in state appropriations, with the majority of the reduction occurring in 2011-12. Internal reductions totaling between 10 percent and 13 percent over three years will continue.

State appropriations, based on the Senate Higher Education Subcommittee recommendation, are estimated at $282.7 million, a decrease of $1.2 million or 0.4 percent from MSU's 2009-10 recurring budget and from the June, 2009, projection for 2010-11.

"These budgets—even under these difficult economic circumstances—are designed to preserve and build upon MSU's strength and stature as one of the top 100 research universities in the world," Simon said.

"We must look forward," Simon said, "and investing wisely in areas of strength ensures MSU, through its reach and impact, continues to solve problems and improve quality of life in Michigan and around the globe."

Due to the uncertainty surrounding state appropriations, the MSU board once again provided to the president, with prior board notification, the authority to increase tuition and fees if appropriations fall short of the projected level. If state appropriations exceed anticipated levels, the president would be authorized to use the excess to reserve against future reductions in state support, allocate funds for bridging purposes and/or fund nonrecurring infrastructure needs, including data systems.

Proposed 2010-11 budgets for the University General Fund, Michigan Agricultural Experiment Station, Michigan State University Extension, and Intercollegiate Athletics total $1.2 billion.

Base budget reductions totaling $29.1 million, or 6 percent, will be applied to all major administrative units according to their reducible bases to help address declining appropriation support and current economic circumstances.

In addition to reductions in health care costs and the forgoing of salary increases, the university continues to take other steps to reduce budgets, including reductions in energy use and the discontinuation of academic programs.

For more detailed information on the MSU budget, visit www.budget.msu.edu.