Tuition for nonresident undergraduates at the University of Minnesota will increase next fall, seven years after the University of Minnesota slashed prices for those students.

 

And while most University leaders say that the gap between resident and nonresident tuition rates should widen, some disagree on how much to charge out-of-state students, how fast to raise tuition for that group and how increased costs for nonresidents could impact the diversity of students at the University.

 

The hike comes after the school received pressure from legislators to raise rates for out-of-state, nonreciprocity students — who currently pay the lowest rate in the Big Ten among public universities. Their resident counterparts pay the fourth-highest tuition among the schools in the conference.

 

“We think we’re selling a Lexus, but we price it like a Toyota,” said Regent Michael Hsu. “When they see our prices being the lowest in the Big Ten, they look at us like there’s a catch somewhere.”

 

Last week, the Board of Regents  approved a 1.5 percent tuition increase for residents and students who are eligible for reciprocity, while also approving a 7 percent jump in tuition for nonresidents.

 

The state Legislature gave the University over $22 million to help freeze tuition in May. Rep. Bob Barrett, R-Lindstrom, said he’d like to see tuition for nonresidents jump to ease the burden of tuition costs on resident students and Minnesota taxpayers.

 

He said the school’s high in-state tuition rates push students to other schools in the Midwest, and the narrow gap between nonresident and resident costs means Minnesota taxpayers end up subsidizing costs for nonreciprocity students.

 

In a June 23 letter to regents, eight members of the House of Representatives higher education committee said they wanted the University to raise out-of-state tuition to help keep tuition lower for residents.

 

“We need to lower [resident tuition],” Barrett said. “Minnesota charges an awful lot.” 

 

Regents and administrators agree tuition for out-of-state students should be closer to the middle of the Big Ten but also said increases should be incremental over the course of a few years, so students aren’t jarred by any increases.

 

“We aren’t going to do this in one year,” said Vice Provost and Dean of Undergraduate Education Bob McMaster. “That will enable us to continue to market the quality of the place … and that we’re still cheap to our peers.”

 

Tuition rates for nonresident undergraduates were reduced for the 2008 school year to attract more nonresident students who don’t pay reciprocity rates, he said.

 

He said since 2007, the University’s population of students from outside of Minnesota and states with reciprocity agreements has grown.

 

The low price for out-of-state students, McMaster said, was one of the main reasons students from elsewhere flocked to the University.

 

But he said effective recruiting tactics, the school’s reputation and its location in a metropolitan area allow the University to boost tuition for out-of-state students.

 

Still, Callie Livengood, vice-chair of the Student Representatives to the Regents and an Illinois resident, said despite the school’s location and reputation, the low price for nonresidents like her was why she chose to attend the University.

 

But Hsu said other Big Ten schools, like the University of Michigan, which has the highest nonresident rate in the conference, don’t have problems with recruiting talented students nationwide.

 

Though tuition hikes for next school year have already been finalized, Hsu said the conversation over tuition strategy has just begun, and regents will continue to tackle the issue next year.