University students will probably see a 13.8 percent tuition hike this fall, raising the price of Twin Cities undergraduate tuition from $4,877 per year to $5,536 – a $659 increase.

University President Mark Yudof announced plans for the tuition increase along with the University’s 2001-02 operating budget at a special Board of Regents meeting Tuesday.

The board will vote on the budget at its July meeting.

“If we want to maintain quality and access, these are the types of tuition increases we will need,” Yudof said.

“I said from the very beginning, this is a lose-lose situation for students,” he said. “It could have been a lot worse for students, but it could have been a lot better too.”

Part of the tuition increase includes a new $75 per semester “University fee” for students to mitigate rising student services costs in the Office of Admissions, the Office of Finance and the Office of the Registrar. The fee will increase to $150 per semester during the 2003 school year.

With the tuition increase the University becomes the fifth most expensive Big Ten institution, preceded by Illinois, Michigan State, Michigan and Penn State, respectively.

Yudof said student tuition increases will support 34 percent, or $110.9 million, of the overall plan for new investments in University faculty and staff, services for students, facilities and technology.

He added that the burden of compensating for shortcomings from the Legislature will be split three ways.

Besides tuition increases, $110.7 million in state appropriations and $103.3 million in cost savings and other resources will be used to cover the University’s financial needs.

“It looks like we’re going to be dependent on non-state sources in the future,” Yudof said.

State appropriations will go toward general operations and stabilizing the Medical School.

Other items in the budget include compensation for faculty and academic investments in computer science, facilities, nanotechnology and agriculture.

The University will reallocate $30 million to high priority areas; it will reduce investments in areas including dentistry and pharmacy by $54.3 million.

“This is a sobering budget,” said Regent Maureen Reed. “It is important to use whatever tools (are) at our disposal to keep academic priorities on track.”

Added Regent William Hogan, “This is hard for me. I believe an increase in tuition makes it fundamentally difficult for students who will be the leaders of the future.”

Yudof said changes in financial aid and tax laws will offset 2002 tuition increases.

The University will budget $5.1 million over the biennium for undergraduate need-based grants.

In addition, Pell grants for students whose parents earn $40,000 or less will increase more than $2 million dollars in 2002.

Currently 8,693 of the University’s 37,021 undergraduates receive Pell grants.

Yudof noted a new federal tax law signed by President George W. Bush will also help students with the burden of tuition increases.

The new law allows single taxpayers with incomes up to $65,000 and persons with joint incomes of up to $130,000 to deduct $3,000 to $4,000 dollars in higher education expenses.

While Yudof outlined available cost-reducing strategies for students, LaKeesha Ransom, student representative to the board, questioned the impact a tuition increase might have on graduate students.

“It’s harder for graduate students to get scholarships and grants. I feel much of this focused on the impact a tuition increase would have on undergraduates,” Ransom said.

She noted that while the average undergraduate’s debt after college is $14,500, graduate and professional students have triple that amount.

Student representative Venora Hung said she supports a decision to raise tuition.

“Students care about quality education,” she said. “I trust the board will cut things that students can do without.”

While the board has a few weeks before finalizing the operating budget, Yudof described the University’s current situation with a William Arthur Ward quote:

“The pessimist complains about the wind; the optimist expects it to change; and the realist adjusts the sails,” he said. “I really view this as adjusting the sails to the wind.”

Melinda Rogers welcomes comments at [email protected]