The 37 universities and community colleges in the Minnesota State system are hiking their tuition by 3% this fall amid persistent enrollment declines.
On Wednesday, the system's board of trustees backed a $2.1 billion budget for the system, which over the past decade has lost almost a fifth of its enrollment. Another projected dip in enrollment this fall will likely mean less revenue from tuition despite the new higher rates.
As state lawmakers in recent years repeatedly required the system to freeze tuition, these costs have remained flat at the 30 member colleges since 2013 and have increased only twice at the universities. Minnesota State officials had vowed to freeze tuition again if the state Legislature granted an ambitious request of $246 million more for the biennium. They received roughly a third of that amount — or a 4.6% two-year increase — and leaders said they needed to turn to students to keep up with inflationary costs.
"This is a very agonizing situation," Chancellor Devinder Malhotra told trustees. "We are at a point when we have to make some tough decisions."
Some system trustees and student leaders voiced strong opposition to the increases, saying affordability should remain the system's top priority and cautioning that higher costs could trigger further enrollment declines. But others argued that after years of largely holding the line on tuition, campuses need the financial injection. Trustees approved the budget proposal 9 to 3.
Malhotra's administration first unveiled the more than 100-page budget proposal Wednesday morning, hours before the scheduled trustee vote. The system's students association decried a process it said hampered oversight by the governing board and input from campus communities and the public.
Administrators said campus presidents had floated various budget scenarios by students, faculty and staff this spring and had rallied support for the increases — a claim student leaders disputed.
University of Minnesota President Eric Kaler revealed his budget proposal June 7, and regents Wednesday approved a 2% tuition increase for undergrads on the Twin Cities campus, slightly less than what Kaler had proposed.
At Minnesota State, college students will pay an average tuition of $4,960 and university students will pay $7,518 on average this coming academic year. Some fees, as well as room and board costs, also will go up. Almost 245,000 students attend the system's colleges and universities.
Leaders stressed that thanks to increases in state higher education grants, college students who receive them will pay slightly less despite the tuition hike and university recipients will pay only $6 more a year. About a third of system students receive state or federal financial support or both.
This past session, state lawmakers directed the system to cap tuition increases to 3% unless a particular campus could make a case that costs jumped "due to extraordinary circumstances beyond the control of the college and university." St. Cloud State University, which has struggled financially in recent years, got permission to seek a 4.2% tuition increase.
The budget assumes a 3% increase in compensation costs, which includes rising expenses for health care and other benefits.
Laura King, the system's vice chancellor of finance, said the system's campuses also are making investments in efforts to expand transfer options, recruit more students and other initiatives, but they are using money saved by making cuts, primarily to employee head counts.
Officials cautioned that lower-than-projected enrollments and employee contract negotiations are unknowns that can complicate the system's budget picture. The system expects enrollment will slip again this fall, dealing a blow to its tuition revenue to the tune of $14 million.
Several trustees such as Ashlyn Anderson said they opposed the tuition increases. At a time when a growing number of students in the system grapple with homelessness, food insecurity and debt, trustees said even increases of a couple of hundred dollars add up.
"If you empathize and sympathize and see the struggles student have, but you don't support them financially, you do nothing for them," Anderson said.
But others worried rejecting the increase would mean loss of programs and employees on the system's campuses. Trustee April Nishimura spoke of having five roommates, eating ramen noodles and going into debt to make it through college — sacrifices she said paid off thanks to the value of a degree.
"Costs go up every year," she said. "This impacts everyone: our staff, our faculty, even this board."
A motion to limit the tuition increases to 1.5% failed. Trustees did pass an amendment calling for a study to assess the effect of tuition increases on enrollment even as some argued the undertaking will be unnecessary and expensive.
Frankie Becerra, president of LeadMN, the college student association, said the tuition increases are a setback for the affordability on which the system prides itself.
He noted trustees were getting hours to process a complex budget proposal, and the public had little chance to weigh in.
"This process is fundamentally flawed and does not inspire trust from those that are footing the bill — students and taxpayers," he said.
King said campus presidents work with budget planning committees made up of employees and students throughout the academic year. She said that while trustees saw the budget for the first time Wednesday morning, the administration had kept them updated as it was developing it.
Kayla Shelley, a student at St. Cloud State who leads the university group Students United, said students lobbied hard for state funding at the Capitol. Now, they are not at all convinced the administration will channel money from the hike to meet their needs.
"You kicked the can to us and said, 'Everyone failed you so now we'll fail you and make you pay more,' " Shelley said. "That's not fair."
Matt Williams, president-elect of the college faculty union, said the state's failure to adequately invest in higher education is the culprit.
"It raises the question: How can you engage people in a budget process — without pitting one group against another — when the budget itself is insufficient?" he said.
Brent Jeffers, who leads the university faculty union, said the system's campuses such as Southwest Minnesota State University, where he teaches, run lean. Without the increase, he said, more advanced courses with lower enrollment would have been on the chopping block.
"I believe the fat has been trimmed," he said. "That 3% saved programs and jobs."
Staff writer Faiza Mahamud contributed to this report.
