Although federal stimulus funds will shield in-state residents at the University of Minnesota from the 7.5 percent tuition increase next year, nonresident students will bear the full weight of the increase. Tuition dollars made up 42 percent of the UniversityâÄôs budget this fiscal year, the first year it surpassed state funding. Enrolling more out-of-state students brings additional revenue without increasing the size of the student body. âÄúWith the state pullback, weâÄôre clearly having to rely more on tuition revenue,âÄù University CFO Richard Pfutzenreuter said. âÄúWeâÄôre going to have to be more creative with ways to raise revenue.âÄù For the current school year, tuition increased by $720 for all students, regardless of residency. The administration is recommending that next yearâÄôs tuition increase by 7.5 percent for all students, but the last of the federal stimulus money will buy down the cost of education for Minnesota residents, who will pay 4.4 percent more next year. But students who originate from outside the state will feel all of the increase, widening the gap between the price tags for each group. Students receiving in-state tuition rates through reciprocity from North Dakota, South Dakota and Wisconsin will pay the full 7.5 percent increase next year as well. Why the change? âÄúRevenue,âÄù Pfutzenreuter said. Out-of-state enrollment increases Data from the UniversityâÄôs Office of Institutional Research shows that the University has attracted a greater proportion of its students from outside the state. In 1999, in a class of 5,195 first-years, 4.3 percent of students came from outside Minnesota and the states whose students receive reciprocity. In 2008, 7.7 percent lived outside the state, not including the 5.5 percent of new international students. University administrators say the growing number of nonresident students is the result of a strategic push to diversify the student body and fill the slots that will be left vacant when the number of graduating seniors in Minnesota wanes. Vice Provost and Dean of Undergraduate Education Robert McMaster said the upper Midwest expects an 8 percent to 10 percent decline in the number of high school students. With some out-of-state students remaining in the state after graduation, President Bob Bruininks said in an e-mail, âÄúWe serve as an important talent magnet for the state.âÄù Jim Miller, president-elect of the National Association for College Admission Counseling, said diversifying the student body is a historic reason for recruiting outside the stateâÄôs borders. But more money is also becoming a factor. For states where public support for higher education is falling behind costs, or states where nonresident students pay full price for admission, âÄúItâÄôs becoming increasingly attractive to get [nonresidents] because they help support the entire enterprise,âÄù Miller said. But Bruininks emphasized that the University isnâÄôt recruiting less in Minnesota in order to make more money. Miller, who is also coordinator of enrollment research at the University of Wisconsin, Superior, said a price difference of a few thousand dollars isnâÄôt an indicator that the institution is revenue-driven. Schools like the University of Wisconsin-Madison, where nonresidents pay about $10,000 more to attend, raises more concerns. Bruininks said the University has charged out-of-state students very little compared to other Big Ten schools. Current increases put it closer to the market. Before McMaster took over as vice provost in 2008, his predecessor focused recruitment on the Chicago area. The success encouraged the University to look elsewhere, like St. Louis, Mo., and Kansas City, Kan. âÄúPlaces where âĦ kids probably wonâÄôt be quite so hesitant about a Minnesota winter,âÄù McMaster said. -Taryn Wobbema is a senior staff reporter.