Starting next fall, undergraduates at the Carlson School of Management may pay more for school than other University of Minnesota students.

A Board of Regents subcommittee on Thursday will discuss gradually phasing in a $2,000 per year tuition surcharge for Carlson undergrads. President Eric Kaler and the interim Carlson dean both support the proposal to hike tuition.

If the board approves it in the spring, Carlson students will pay an extra $500 on their yearly tuition starting in fall 2012. The surcharge will rise in $500 increments until it reaches $2,000 per year in 2015.

ThatâÄôs independent from any University-wide tuition increases in the future.

The charge would affect all undergraduates in the schoolâÄôs Bachelor of Science in business programs. The school would offer scholarships to help some students manage the higher costs.

In a letter to Carlson students Friday, Interim Dean Sri Zaheer said the surcharge would not affect students eligible for Pell grants or those who receive U Promise Scholarships.

Carlson says it will raise about $4.9 million in recurring revenue once the charge is fully implemented.

The money would go toward adding and retaining faculty, whose numbers have remained static in recent years despite the schoolsâÄô growth, according to ZaheerâÄôs letter.

Carlson started considering the surcharge a year and a half ago, under former Dean Alison Davis-Blake. It will require a change in the Board of Regents policy, which will likely come to a vote in February.

If the board OKâÄôs the change, it would put Carlson in line with many business schools across the country that already have a differential tuition system.

Students in business schools at the University of Illinois âÄî Urbana-Champaign, the University of Michigan, Penn State, the University of Texas âÄî Austin and the University of Wisconsin âÄî Madison pay more than their peers, according to a 2009 Carlson survey. The differential at those schools ranges from $754 at Ohio State to $4,824 at Illinois.

Tom Sullivan, the UniversityâÄôs senior vice president for academic affairs and provost, said the surcharge will help Carlson compete with other business schools.

Though fees vary across programs, the University has had an egalitarian tuition model âÄî meaning every undergraduate pays the same amount across all schools âÄî for more than 20 years, Sullivan said. The only differences come from residency.

But 20 years ago, it was expensive to keep track of differential tuition. ThatâÄôs not the case anymore, he said.

Administrators worried in the past that students would wait to enter more costly programs to avoid paying more, which would delay their time to graduation. Sullivan said CarlsonâÄôs limited space and high demand will solve that concern.

Since Carlson opened Hanson Hall in 2008, its undergraduate student population has increased by nearly 50 percent, according to ZaheerâÄôs letter. In that period, state contributions have diminished and now account for less than 4 percent of CarlsonâÄôs budget. All told, state contributions are down more than $10 million annually since 2006.

Sean Klun, a finance junior in Carlson, said he disagrees with the cost bump.

Paying for tuition, housing and living expenses is already a lot to manage as a student, he said.

Klun doesnâÄôt have a problem with the student-to-faculty ratio in most of his classes, he said, adding that many classes have teaching assistants to help students.

Carlson officials declined to comment on the proposed change until after the Board of Regents meets next week.