Nonresident drop of 26 percent at University of Minnesota forces slowdown in price increases
MINNEAPOLIS—A 26 percent drop in new nonresident students this fall has University of Minnesota leaders pulling back on plans to aggressively increase the cost of attendance.
Over the past four years, the U has raised tuition by 49 percent for students who live in other countries or in states outside of Minnesota, Wisconsin, the Dakotas and Manitoba, who pay a lower, in-state rate.
Still, the U's nonresident, nonreciprocity charge of $30,438 for tuition and fees remains lower than all but two Big Ten schools, Purdue and Nebraska.
President Eric Kaler and the Board of Regents have been on a mission to bump that rate up to the middle of conference. But after a down year, they're rethinking that strategy.
On the heels of a 15 percent tuition hike, nonresident freshman enrollment fell to 1,015 this fall from 1,363 the year before. Corresponding net revenue fell to $23.7 million from $28.5 million.
"I know from talking with nonresident students that tuition is becoming a major factor in their decision to attend this institution," said Bob McMaster, vice president and undergraduate dean.
Kaler on Thursday, Oct. 11, recommended a 10 percent tuition hike for next year's nonresident freshmen — likely bringing the U to eighth or ninth in the Big Ten. Kaler previously had penciled in a 15 percent bump for next year.
McMaster said that as recruiters develop the New York and Texas markets, his office should be able to bring in 1,125 nonresident freshmen next fall with a 10 percent tuition increase.
Regents won't act on the recommendation until December but seemed satisfied Thursday with Kaler's proposal.
"We are finding the elastic portion of this demand curve, and we need to, I think, think really hard about how much further we go," David McMillan said, expressing support for a 10 percent increase.
Some worry that raising tuition too high will discourage talented students from attending the U and joining Minnesota's workforce.
But regent Darrin Rosha, favoring another 15 percent nonresident tuition increase, suggested it's better to enroll more Minnesota residents. He said they're more likely to stay in the state after school, and their presence boosts lawmaker support for the U.
"I like that we're heading in the right direction. I'd just push us a little bit further," he said.
This year's loss in new nonresidents was somewhat offset by students paying the in-state rate. The class features 40 more Minnesotans last year — they make up 65.5 percent of all freshmen — and 88 more from reciprocity states.
The U's low cost for nonresidents dates to 2008, when the U slashed its sticker price to $12,500 from $20,130. The strategy has created a surge in student applications and helped push the U's average ACT score above 28.
But leaders no longer want to give the impression the U is a discount university.
"We're convinced that an education at this university is as good as any of our peers," McMaster said.
Regents have not yet discussed where to set resident tuition next year.