The average Michigan State University student will see tuition increase by approximately $540 – or 5.2 percent – next fall under budget guidelines approved by the MSU Board of Trustees at its June 19 meeting.

However, should MSU receive federal government stimulus funds, the tuition hike could be reduced to between 2.5 percent and 3 percent for resident, undergraduate students.

In addition, the board also approved an unprecedented 30 percent increase in financial aid over the next two years. 

In order to make it easier for students and families, as well as the university, which has reduced expenditures by more than $70 million over the last six years, to plan, for the first time in university history the board approved two years of budget planning guidelines.

Under these guidelines, tuition will increase 5.2 percent in 2009-10 and 4.9 percent in 2010-11, for a total of 10.1 percent over the two-year period.

Financial aid will increase 17 percent for 2009-10 and 13 percent for 2010-11, totaling 30 percent, bringing the portion of MSU’s general fund budget dedicated to financial aid to more than $100 million by 2010-11.

“We’re all in this together,” said MSU President Lou Anna K. Simon. “These are very difficult economic times for all of us – students, families, the state and MSU. By taking the step of establishing two years of budget guidelines, we’re doing our best to provide as much information as possible over a longer period of time to allow students and their families, as well as MSU, to navigate uncharted waters.”

Simon noted that both the tuition increase and the investment in financial aid align with MSU’s long-standing commitment to maintaining the accessibility of a high quality education for Michigan students.

“While these uncertain economic times will continue, we must seek to preserve the quality and momentum of Michigan State, remain internationally competitive, and ensure that MSU is a place of opportunity for all students,” she said. “It is this combination that creates true value for Michigan.”

The amount of state appropriations is unknown and may not be established until fall. All MSU budget decisions are made on the assumption of a 3 percent appropriation reduction totaling approximately $284.2 million.

Due to the uncertainty surrounding state appropriations, the MSU Board of Trustees provided authority to the president, with prior board notification, to increase tuition and fees if appropriations fall short of the projected level. If state appropriations exceeded anticipated levels, the president would be authorized to use the additional support to decrease the base budget operating reductions required by the guidelines.

MSU deans and vice presidents have agreed to donate their annual salary increase to the MSU scholarship fund of their choice, adding another half million dollars to the funds available to assist students.

Because of the two-year approach to planning, revenue and expenditure details will be presented to the Board of Trustees in spring 2010 for review and possible updating based on current economic circumstances.