Diving overview:
- The University of Minnesota will make budget cuts, increase tuition and make academic investments amid rising costs due to ongoing inflation under the fiscal 2025 budget proposed by Interim President Jeff Ettinger last week..
- The plan cites: 3.3% cost increasewith Cost reached $5 billion. Despite inflation, the university projects a modest surplus as follows: Sales expected to be $5.1 billion.
- Public universities plan to raise wages and increase spending. $63 million for academic and support services. To address rising costs and investments, Ettinger's budget also includes a tuition increase. 4.5% increase in Rochester For the campus and men-state students at the system's flagship Twin Cities campus..
Dive Insights:
Although inflation has slowed compared to historical levels, college costs remain high and a source of financial stress, especially when combined with declining enrollment rates.
jointly funded research institute Latest higher education price index predict The overall inflation rate for college costs in 2024 is 3%. It decreased by 1 percentage point compared to last year, and decreased by more than 2 percentage points compared to the previous year. Inflation rate 5.2% in 2022 — But that still means overall costs are much higher than they were before the pandemic.
The University of Minnesota faced difficulties during the budget planning process last year. 4% increase expense. In that respect, the institution's experience is consistent with that of the sector as a whole on a price index basis. Ettingers proposed budget When referring to some form of a word ‘Inflation’ No. 25; It specifically mentions increases in food, service and labor costs.
Since last year, the university's revenues and expenses have both increased by about $500 million. In addition to spending, universities are also investing to cover the increased costs of inflation.
that much $63 million Ettinger's budget includes additional costs for: It includes student scholarships for growing computer science and engineering programs, faculty and support services, new resources for humanities curricula, and enhanced campus education in areas such as sexual misconduct.
Increases in costs and expenses will be partially offset. $17.5 million Budget cuts and operational changes in the Ettinger budget.
Ettinger's budget did not include unit-by-unit examples. Plans are still being worked out. “The total cost savings are significant but do not represent one or two major initiatives,” the budget document states. “Instead, it is a collection of individual actions and decisions spread across virtually every unit of the university.”
To save money, the budget envisions cutting faculty and staff positions through “natural attrition” and replacing departing employees at lower pay levels. It can also reduce operational costs, for example:Strain food and supply budgets for units, reduce spending on travel and professional services, reduce strategic planning, and reduce the number of in-person events held.
Also offsetting the cost increases are tuition increases. With the growth of the Twin Cities and Rochester campuses, Ettinger's budget Tuition at the Crookston, Duluth and Morris campuses will increase by 1.5%, and tuition for nonresident students at the Twin Cities campuses will increase by 5.5%.
The board has requested public input on the budget and is holding a public meeting to discuss Ettinger's recommendations for the budget. May 10th The board's Finance and Operations Committee is scheduled to consider action on the budget on June 13.