UM-Dearborn Connect Registration and Records

UNDERSTANDING TUITION

June 20, 2013


Q. What is the current cost of tuition at the University of Michigan-Dearborn?

Most in-state freshmen, who started classes in Fall of 2012 paid $5,241 including fees, per semester, in tuition for the 2012-13 academic year, based on 15 credit hours. Some additional fees also may apply. What a student actually pays depends on the amount of financial aid they receive. Also, the exact amount of tuition can vary somewhat by the school or college in which the student enrolls and by the studentís class standing.

Q. How much will tuition increase for the 2013-14 academic year?

On June 20, 2013, the University of Michigan Board of Regents approved a 3.5 percent undergraduate and graduate level tuition increase for the 2013-14 academic year for all Michigan residents. A 2.0 percent undergraduate and graduate level tuition increase also was approved for the 2013-14 academic year for all non-residents.

Most in-state freshmen students who start classes in Fall of 2013 will pay $5,427, including fees, in tuition for the 2013-14 academic year, based on 15 credits. This is an increase of approximately $186 per semester. What a student actually pays depends on the amount of financial aid they receive. Also, the exact amount of tuition can vary somewhat by the school or college in which the student enrolls and by the studentís class standing.

Q. What does tuition money pay for at the university?

Tuition pays for the core academic mission of the university. That includes expenditures, like instruction, financial aid, academic advising, libraries, computing centers and other services. Tuition represents approximately 80 percent of the universityís general fund budget; the remainder of general, designated, auxiliary and expendable funds is provided by outside sources including state appropriations, donor gifts and grants.

Q. Why is it necessary to raise tuition?

One of the key reasons for increasing tuition is the decline in state funding. UM-Dearbornís state appropriation is 11 percent less than it was 10 years ago.

In the 1970s, state funding made up 80 percent of UM-Dearbornís general fund budget Ė the budget that pays for the universityís core academic program. In the 2013-14 academic year, state funding is expected to represent 19 percent of the general fund budget.

University of Michigan-Dearborn is committed to working creatively and in partnership with Governor Rick Snyder and the state legislature to better serve Michigan residents. The university is grateful for an increase of 1.2 percent in state funding for the 2013-14 academic year. This yearís increase in state funding helped to lower the tuition increase experienced in past years.

Q. Why does UM-Dearborn tuition go up each year?

Tuition helps support learning opportunities, quality teaching, undergraduate research experiences and the respected scholarships that make a UM-Dearborn education a sound investment. Through prudent fiscal management, we are committed to maintaining the high standards of the university and to supporting its priorities and initiatives, including financial aid, which will help prepare students for success.

Maintaining the excellence of our educational programs and ensuring access to the university for students from all economic backgrounds are among UM-Dearbornís top priorities. Accordingly, we have consistently boosted financial aid each year for students with demonstrated need.

The annual appropriation from the state of Michigan also plays a key role in setting tuition and fees. At the same time, UM-Dearborn is experiencing increased costs in core expenses, although the rate of growth in these costs has been tempered by rigorous cost cutting.

The chart below depicts the relationship between state appropriations and consumer price index (an index of increasing costs).

UM-Dearborn Funding Gap as a result of reduced State Appropriation

Q. Is tuition expected to continue to increase in the coming years?

While there is no way to predict the future, one thing is for certain. The current financial condition of the state of Michigan will take time to improve, as evidenced by the gradual upward trend of the stateís economic indicators. Universities will continue to face uncertain financial news at the state level in the coming years. All universities, including UM-Dearborn, will continue working to reduce costs and seek additional revenue sources, while at the same time provide a quality education for its students and remain accessible to students from a variety of backgrounds.

Q. What is UM-Dearborn doing to help defray the cost of higher education?

The university has been increasing each year the amount of money dedicated to financial aid and working aggressively to contain cost increases.

Increasing financial aid: The university remains committed to providing financial aid that makes a UM-Dearborn education accessible to qualified students who can least afford it. Each year the university increases centrally awarded financial aid by at least the same percentage as tuition is increased. UM-Dearborn has increased financial aid for the 2013-14 academic year at a rate much greater than the tuition rate increase. Nearly 70 percent of undergraduate students who are Michigan residents receive some type of financial aid.

Financial aid increases with increases in tuition and decreases in the State Appropriation budget (Academic Years 2004-05 through 2013-14).

Financial Aid Increases

*** 2013-14 increases pending U-M Board of Regent approval.

Aggressively cutting costs: UM-Dearborn has saved over $3.4 million in cost containment since 2009. With these cost savings the university has redirected nearly $7.5 million from its operating budget over the past decade to support expenditures of the highest priorityóeven in the face of rising energy costs, increasing health care costs and the need to invest in new technology. In the 2013-14 budget, an additional $230,000 will be redirected to support expenditures for the highest priority to operate UM-Dearborn. Savings have resulted from reorganizing existing processes, combining staff in operations areas, gaining departmental efficiencies, and streamlining purchasing practices with the Ann Arbor and Flint campuses. All of this is being done carefully to preserve the high-quality teaching, service and research that contribute to the world-class education our students expect.

Q. When you say 70 percent of UM-Dearborn students receive some financial aid, what do you count as financial aid?

Financial aid is a term that has a common definition so that all U.S. colleges and universities use it consistently. A typical financial aid package might include more than one type of aid. Financial aid can include:

Loans: Loans are borrowed funds that must be repaid, with interest, after the student has completed school.

Scholarships: Scholarships are gift funds that often are awarded to students with high academic achievement or special talents; they do not have to be repaid.

Work study jobs: These jobs are available to students who have financial need. Under the work-study program, a percentage of a student's earnings are paid through federal or state funds and the studentís employer pays the remainder.

Q. I have heard the University of Michigan has millions of dollars in reserve funds. Why canít this money be used to help reduce tuition increases?

The universityís operating budget is much like a corporate or personal budget. Financial resources are put into reserves for future projects that enhance the student experience or unexpected situations that would require one-time funding. Reserve funds allow the university to maintain the successful operation of the campus based on current needs and revenue streams. Reserve funds allow the university to better plan for the future and quickly react to unforeseen situations.