The University of Minnesota Board Of Regents  will preview a budget heavy in cuts and a tuition increase to make up for loss of state funding at their meeting Friday.

The University plans to raise undergraduate instate tuition by 5 percent. Combined with the loss of federal stimulus money the University has received the past two years, returning instate undergraduate students would pay 12.5 percent more.

And the undergraduates are not the only ones being hit. The University is trying to raise its total tuition revenue by 34 percent, so all academic programs at the University will see a tuition hike.

In the coming weeks, state legislators will work to finalize a higher education budget in a special session. The UniversityâÄôs administration has drafted a provisional plan based on the worst case scenario.

The provisional budget assumes that state funding will not drop below the $520 million proposed by the legislature before it was vetoed by Gov. Mark Dayton.  That would leave the University with $70.8 million less in state funding than it received last year.

Meanwhile UniversityâÄôs operating costs, like wages and facilities management are going to increase a projected $58.9 million.

Combined with the loss in funding, it is an almost $130 million problem for the university.

Lizzy Shay, president-elect of the Minnesota Student Association , said that while the economic reality of the University is understandable, the increased cost has already made attendance to the University too expensive for some students.

âÄúThe tuition hikes will be absorbed for a short period of time,âÄù she said, âÄúbut ultimately itâÄôs not sustainable.âÄù

The University has been steadily losing funding from the state since 2009.

Since the exact amount of funding the University will receive is still unknown, the proposal includes a clause that states the budget can be amended if there is any significant changes in funding, UniversityâÄôs Chief Finance Officer Richard Pfutzenreuter   said.

âÄúItâÄôs really in the hands in of the governor and the legislators to work out their differences,âÄù he said.

The Board will approve the final budget on June 20 before the beginning of 2012 fiscal year on July 1 âÄì the same day President Bob Bruininks  will step down.