Regents focus on tuition, economy

by Adam Overland

February 18, 2009

The University of Minnesota Board of Regents addressed a number of weighty topics at its monthly meeting Feb. 11-13, and a few lighter subjects as well.

President Robert Bruininks reported to the Board on the critical challenge of the economy and its effect on the University.

Bruininks said that the U is looking at a number of options to deal with the proposed 2010-11 biennial budget reduction of $156.1 million total, or $78 million a year, recurring. If the year-one cut were balanced with either tuition hikes or layoffs alone, he suggested the impact would be immense-if tuition was used, it would rise 12 percent in year one alone; if layoffs were used, 900 would be necessary over one year. But the scenarios were hypothetical.

"Our financial challenge is greater than the cut alone," Bruininks went on to explain. "In addition to the $78 million annual base reduction, we have costs we cannot defer--facilities' operating cost, debt, legal and contractual obligations--that represent $55 million in required spending. For fiscal year 2010, that puts our budget challenge at $133 million."

"We are looking to minimize as much as possible the impact on students and on our employees. We do not want to solve this problem with mass layoffs," said Bruininks.

The president estimated that at least two-thirds of cost reductions would come from limiting programs, from administration cuts, and from non-tuition cost reductions. He highlighted recent cost saving measures, including the Retirement Incentive Option, the hiring pause, and the executive salary freeze.

The U is currently modeling additional options for administration restructuring; salary and wage freezes (subject to collective bargaining); health benefits plan design changes; furloughs; and purchasing, energy, printing, and space management cost reductions.

Tuition

The U has been a leader in keeping higher education affordable, Bruininks said.

Over the past five years, the University has created and implemented specific strategies designed to maintain affordability for undergraduate students from all income levels. Most notably this has included the Founders Free Tuition Program, which guarantees grant and scholarship assistance to cover tuition and all required fees for Pell-eligible Minnesota students, and the 13-credit tuition band, which encourages graduation within four years.

"One of the best ways for students to manage the cost of their education is to graduate in four years," said Bob McMaster, vice provost and dean of undergraduate education.

McMaster noted that total loans and grants (state, federal, and University) from 2001 to 2008 have been increasing, but in 2006, for the first time the U's grant program exceeded the combined state and federal grant programs. The U now provides $75 million in undergraduate scholarships and grants. Half of all U students receive grant or scholarship support that discounts tuition by an average of $6,650, said McMaster.

McMaster noted that the U ranks second in the Big Ten in providing support in the moderate-income bracket and third in support to low-income families, providing more than 60 percent of the cost to the student.

Bruininks stressed that in the coming years, the U would seek to provide more assistance to students from moderate-income families.

Stimulus to help higher education

In a positive sign from the federal government, the fiscal stimulus bill includes a number of key elements related to higher education and student support. President Bruininks praised the legislation at a Board of Regents meeting and urged support for its passage.

"This is a fantastic initiative--one that recognizes the key role that education and research universities, in particular, play in our building our economy. The one-time infusion under the stimulus package will give some relief to the University of Minnesota but mostly, I hope, to the state of Minnesota," said Bruininks.

Provisions of the bill include

• A $500 increase in the Pell maximum
• A new $2,500 education tax credit, 40 percent of which would be refundable
• $200 million for the work-study program
• $100 million for teacher enhancement grants

Other Board actions

The Educational Planning and Policy Committee reviewed the School of Dentistry's proposed new dental therapy program, which would be the first of its kind in the nation. Designed to tackle dental care access problems across Minnesota and the Upper Midwest, the program will educate health professionals who will perform as mid-level providers with a skill set between dental hygienist and dentist.

Rhodes Scholar Ashley Nord was recognized by the Board of Regents during its February meeting

The Board recognized 2009 Rhodes Scholar Ashley Nord as well as the University of Minnesota Duluth Bulldog football team, winners of the 2008 NCAA Division II football championship.

The UMR Master Campus Plan was approved by the Board. The plan calls for the newest U of M campus to remain in downtown Rochester and anticipates potential growth up to 5,000 students over the next 20 years.

The Office of Institutional Compliance presented the critical issues that emerged from an external evaluation last fall, as well as the next steps in the process. Conflicts of interest have been on the forefront of news as industry relationships and universities grow closer.

The Board meets next on March 13.

More information on the Board of Regents can be found at www.umn.edu/regents.

Brief