ST. PAUL — The University of Minnesota’s governing board declared victory Thursday, Oct. 10, on its multi-year strategy to shift the tuition burden back to students who come from other states and countries.

Net revenue from nonresident, nonreciprocity students on the Twin Cities campus will be around $138 million this school year — up $32 million, or 30%, compared to four years prior.

In that time, the sticker price for nonresidents has jumped 53%, yet their enrollment has been steady, up 2%, due in part to increased recruiting.

“It’s been a success,” Vice Provost Bob McMaster told the Board of Regents, which focused on raising nonresident rates in order to spare in-state families.

That $32 million in new annual revenue is the equivalent of a 10% tuition hike on in-state students.

2008 discount

In 2008, the University of Minnesota initiated a steep discounting strategy for new nonresident students, who would pay just $4,000 more than Minnesota residents. It helped diversify the student body and raise the school's academic profile as enrollment applications poured in.

Five years later, the university began gradually stepping away from that game plan. The pace since has picked up, with double-digit percentage increases for nonresidents each of the last three years.

Today, yearly tuition is $31,616 for nonresidents and $13,318 for residents.

Nonresident tuition and fees at the University of Minnesota now rank eighth among the 14 Big Ten schools. That’s right around where regents want to be.

“I think we’re getting close to the end,” Regent Michael Hsu said.

President Joan Gabel has not yet made a nonresident tuition recommendation for next year, but Chief Financial Officer Brian Burnett said, “I don’t think we’re leaning towards another double-digit tuition increase.”

Sudden decline

Officials fretted last fall that the plan was backfiring as nonresident enrollment fell by 26% in a single year. But this fall, those numbers rebounded:

  • International freshman enrollment reached an all-time high, at 472 — 183 more than last year, which “none of us expected,” McMaster said.
  • There were 770 new freshmen from nonreciprocity states, 44 more than last year.
  • Meanwhile, the university welcomed 4,130 new freshmen from Minnesota, 218 more than last year.
  • The number of freshmen from Manitoba or three neighboring states, who pay the in-state rate or close to it, fell by 144 students to 906.

The concern now is that nonresident students might leave before they finish their degrees.

An annual student experience survey revealed anxiety among nonresident students about their attendance costs. Some said they’re considering a transfer.

“What’s alarming to me … is the sense that some of these students might bolt from the university,” McMaster said.

The University of Minnesota’s Chicago-area recruiter reported that high school counselors there have noticed the school no longer is as “generous” as it once was.

“If we’ve been generous in the past,” Regent Steve Sviggum said, “it’s been on the backs of Minnesota students or Minnesota taxpayers and families.”