The University Record, July 23, 1996

Tuition increases for 1996-97 approved

By Julie A. Peterson
News and Information Services

The U-M will have one of the smallest tuition increases during the past 30 years as part of the 1996-97 General Fund budget approved by Regents in their meeting last week (See chart at end of article).

The tuition rate for resident, incoming freshmen on the Ann Arbor campus will increase by 3 percent for the coming year. The figure, notes Provost J. Bernard Machen, is within the range of other Michigan public universities, which range from 0.0 percent to 5.9 percent.

"I am pleased that we will have one of the lowest tuition increases in the last three decades," Machen says. "We have given extensive consideration to the financial burden borne by our students and their parents. The support we received in Lansing---a 4.6 percent increase in our appropriation this year---has had a direct impact on our ability to keep tuition down."

The University received an increase from the state of $13.2 million. However, noted Machen in the written proposal to the Regents, the state appropriation contains some uncertainty because the state budget this year "was built on certain assumptions about actions to be taken at the federal level. We have good reason to believe that the appropriation to the state-supported universities will be protected in the event of a mid-year executive order cut, but there is no guarantee. With this potential problem in mind, we have exercised caution" in making revenue projections.

The Ann Arbor campus' 1996-97 General Fund budget is set at $796.7 million, an increase of $26.3 million over the previous year. The budget relies largely on state appropriations and student tuition revenues, and pays for teaching, research, library services, scholarships and fellowships, maintenance and operation of physical properties, among others.

A significant factor in the budget is the implementation of Value Centered Management (VCM), a system under which individual units will have greater control over, and responsibility for, their own revenues and costs.

"At this moment of transition from our previous incremental style of budgeting to
VCM . . . we cannot overlook the reallocation process that has become a traditional part of our budget activity. Year after year, every unit, large and small, must reassess its priorities and make difficult new choices, shifting resources from lower to higher priority use," Machen wrote in the proposal.

"The implementation of VCM will align unit incentives more closely with University goals. We expect that the new responsibilities for both revenues and expenditures will lead to increased efficiency through greater cost control as well as expanded entrepreneurial enterprise."

By far the largest proportion of the new expenditures will go toward increased financial aid and other forms of student support ($6.9 million) and salary increases for faculty and staff ($8.6 million). Machen noted that the additional allocation for financial aid will allow the University to continue its commitment to meet the demonstrated financial need of all Michigan undergraduates.

In addition to incremental funds provided for faculty and staff compensation, each unit will be asked to enhance its own individual compensation program through significant internal reallocation in order to assure a merit salary program on the order of the rate of inflation.

Other major areas targeted for increased expenditures include operating costs (utilities, maintenance, etc.) for new buildings coming into use in 1996-97, funds for targeted faculty hiring and library acquisitions.


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The University of Michigan - Ann Arbor
Student Tuition for Full-time Students
Excluding Business Administration, Dentistry, Engineering, Kinesiology,
Law, Medicine, Pharmacy, Public Policy and Social Work



Fall 1996 Rates


$ Change

% Change


Lower Division



$ 81


Upper Division












Lower Division





Upper Division











Current and FY97 rates per term include $185 Infrastructure Maintenance Fee.
FY96 rates per term include $101.00 Health Service fee.
FY97 rates per term include $105.00 Health Service fee.