LANSING — Students will pay a few hundred dollars more to attend Michigan State University for the 2025-26 academic year, but the exact amount is still in flux while state legislators iron out Michigan’s next budget.
Trustees voted June 13 at a meeting in Traverse City to raise tuition 4.5%, but included language that will reduce that amount if the state budget includes a cap that is lower than that, the university said.
The state Legislature typically determines a percentage cap by which universities can raise tuition for in-state students, and if an institution goes over that amount it is no longer eligible for millions in state funding.
MSU’s tuition increase is more than last year’s of 2.7% for in-state undergraduates, and more than the University of Michigan’s increase of 3.4% for next year.
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Last year, the cap on tuition increases was 4.5%, and both Democratic Gov. Gretchen Whitmer and the Democratic-controlled Michigan Senate proposed that same cap for the coming fiscal year in their budget recommendations. However, the Republican-controlled Michigan House of Representatives previously recommended a 3% cap, but the bill passed with a substitute that brought the cap to 4.5%.
“If you’ve been reading or listening to the news this week, then you have heard of the threat of additional state appropriation cuts,” said Trustee Sandy Pierce, who chairs the board committee of budget and finance. “State appropriations per resident undergraduate student has fallen by 44% since fiscal year 2000 when adjusted for inflation.”
Pierce was likely referring to the recent state House recommendation that millions of dollars be diverted from MSU and the University of Michigan to other universities across the state. MSU would see a state operations funding cut of about 18%, or $56.6 million. U-M would see a cut of about 65%, or $234.4 million.
House Majority Leader Brian Posthumus said in a statement the proposal would prioritize in-state residents over out-of-state and international students. MSU and U-M receive millions more in tuition and living costs from students coming from outside of Michigan.
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As of now, per-semester base costs for undergraduate students from Michigan will increase by $399. Freshmen will pay $8,458 per semester, sophomores will pay $8,653 and most juniors and seniors will pay $9,642. Juniors and seniors from Michigan who are in the Eli Broad College of Business or the College of Engineering will pay $9,935 per semester.
Undergraduate students from outside Michigan and international students will also see a per-semester base rate tuition increase of $399. Freshmen and sophomores will now pay $22,150 and juniors and seniors will pay $22,818. Juniors and seniors who are in the Eli Broad College of Business or the College of Engineering will pay $23,127 per semester.
Graduate students will see per-credit-hour costs increase by a similar rate, the university said.
The university said in a statement that the budget allocates an additional $6 million to student financial aid.
Proposed cuts to MSU, U-M
The state’s final budget may take some time to negotiate between the Republican-led House and the Democratic-led Senate. Lawmakers have a July target date to finalize it, but the deadline is the end of the current fiscal year, on Sept. 30.
The two sides are far apart on higher education funding, among other issues.
“Michigan’s largest universities have been getting way more than their fair share for far too long,” Rep. Greg Markkanen, R-Hancock said in a June 11 statement. Markkanen chairs the House Higher Education and Community Colleges budget committee.
“Our plan sets things right by trimming the fat off MSU and U of M and distributing that funding amongst our 13 other remarkable universities,” he said.
The House’s proposal also cuts about $717,000 combined from two university departments, MSU’s AgBioResearch and MSU Extension’s general fund. Specific programs funded through those funds are also targeted. MSU’s Project GREEEN (Generating Research and Extension to meet Environmental and Economic Needs) would lose $5.6 million in state appropriations.
Both Whitmer’s and the House’s proposals would prevent MSU’s AgBioResearch and Extension from using appropriations for the Agricultural Climate Resiliency Program, which addresses environmental sustainability issues in Michigan agriculture and promotes the protection and efficient use of water resources.
The House also proposes cutting $80,000 the Future Farmers of America Association receives from MSU.
MSU’s current financial issues
Questions about state funding are coming at an already difficult time for MSU. President Kevin Guskiewicz, along with Chief Financial Officer Lisa Frace and other top university officials, wrote in a May 7 memo to department heads and deans that the university would be going through 9% cuts over the next two years due to the university’s “modest recurring deficit over the past two years.” The cuts are being made to get the university back to financial stability, officials said.
During the meeting, Guskiewicz said his office would cut the full 9% this year with smaller cuts the next, but specific details about what would be cut were not available June 13.
Other financial issues the university and others nationwide are facing include navigating cuts to research funding, paused research projects and the potential loss of international students due to federal moves to restrict them from studying in the United States.
More restrictions on universities
The House proposal adds several other restrictions and state reporting requirements for university administrators.
Universities would have to “report on information related to the current university president, provide a list of the number of out-of-state students by state origin, provide a list of the number of international students by citizenship, certify that all enrolled students are lawful residents, and provide the contact information of students who are not lawful residents to the director of MiLEAP.”
If institutions did not report this information, along with other required information on university finances, budget, revenue, expenditures and employee compensation, they would have 5% of operations funding withheld.
Public universities also would not be able to devote more than 10% of their total salary spending on administration without half of whatever they spend over that cap being taken from state operations funding under the House’s plan. Last year, MSU spent about $1.5 billion on salaries, and this year’s budget shows the university expects to spend nearly $1.6 billion. According to the House’s proposal, MSU could not spend over $160 million on administrative salaries. It was unclear how much MSU currently spends on administrative salaries.
The House also added language that furthers several Republican priorities, including threatening funding for public universities that participate in intercollegiate athletics from allowing “biologically defined males from participating in biologically defined female sport teams.” Universities also would have funding taken away for having any common spaces that are restricted by sex or race, or having any public ceremonies or gatherings restricted by sex or race.
The House proposal also states if public universities spend money on diversity, equity and inclusion, that amount of money would be taken from state operations funding. Last year, MSU spent at least $2.5 million on its Office of Institutional Equity and Inclusion, the university’s functional budget report shows.
U-M raises tuition
U-M raised its tuition rates June 12. In-state tuition and fees for in-state undergraduates will increase by about $610, or 3.4%, for an annual rate of $18,346. Tuition and fees for nonresident undergraduate students will increase by $3,016, or 4.9%, for an annual rate of $63,962, according to information posted on the university’s website.
Wayne State University’s Board of Governors is expected to meet June 26 to set their budget.
Contact Sarah Atwood at satwood@lsj.com. Follow her on X @sarahmatwood.
This article originally appeared on Lansing State Journal: Michigan State hikes tuition 4.5% amid state budget uncertainity
Reporting by Sarah Atwood, Lansing State Journal / Lansing State Journal
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