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June 22, 2018

MSU Board approves first-ever two-year budget with tuition rate and pay freezes

Anticipating one of the largest and most diverse incoming freshman classes, the Michigan State University Board of Trustees adopted student-focused budget guidelines for the next two academic years that call for tuition freezes, tuition restraint and financial aid increases. The budget freezes tuition rates in 2018-2019 and 2019-2020 for in-state freshmen, and in 2019-2020 for all undergraduate students as part of a new block tuition structure.

“The competition for new students in the future will be intense as the number of high school graduates declines in Michigan and across the Midwest,” said Interim President John Engler. “This budget recognizes that tuition costs can’t keep rising—we need to put students first by controlling tuition and increasing student aid.”

Under the new budget guidelines, tuition for undergraduate students with sophomore standing and above, as well as out-of-state freshmen, will increase by less than a dollar a day for the school year beginning in August 2018. Junior and senior engineering and business students, who command higher post-graduation starting salaries, would see average increases of about $542.

In addition to the tuition rate freeze for the 2019-20 academic year, at the same time MSU will establish a block tuition structure for undergraduate students taking between 12 and 18 credits. The tuition rate will be based on 15 credits per semester. MSU is currently one of only two schools in the Big Ten without a block tuition structure, which can help address student debt as students are more likely to get through college on time with a fixed rate.

As in past years with tuition increases, financial aid also will increase by $6.4 million, or approximately 4.5 percent.

The budget also includes a freeze on pay for all top administrators and deans, a reduction from 2.5 percent to 1.5 percent in average faculty pay increases and no reductions in staff compensation and no university-wide layoffs.

“Balancing the needs of students and their families with the expectation of our university community requires all parties to give some,” Engler said. “I think a two-year budget outlines a path forward that can be a win-win outcome.”

Also during the meeting, board members were informed of the university’s plan to use bonding to pay for the $500 million mediated settlement with the survivors of Larry Nassar. Bonding is the quickest process to establish the settlement fund with least amount of immediate impact on MSU programs and services. The university is still in negotiations with applicable insurance providers to be reimbursed based on those policies.

A separate bond resolution, for $381 million, also was approved for construction financing to support university construction projects, such as the new STEM building, campus water system improvements, music building addition, modernization at the T.B. Simon Power Plant and renovations at Wonders Hall.

The board also addressed changes to the university tenure policies including provisions that impact the ability of tenured faculty to take paid leaves of absences during dismissal cause proceedings, and whether or not faculty members can obtain retiree status from the university during the pendency of dismissal for cause proceedings. The changes addressed by the board will be reviewed by the Faculty Senate at an upcoming meeting. *faculty tenure…

Other board items included:

• A presentation by MSU physiologist Eran Andrechek about new research that could expand lung cancer therapies.
• MSU’s mobility efforts to improve traffic patterns on campus in order to reduce walking distances for students and make campus safer.

The next board meeting will be Friday, Aug. 31.