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U-M unveils tuition guarantee for Michigan students with need

  • Contact Rick Fitzgerald

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ANN ARBOR—The University of Michigan will launch a new financial aid program for in-state students that offers a "Go Blue Guarantee" of free tuition for up to four years for students with family income of up to $65,000.

The new program—which includes families earning up to what is roughly the state's median income—will launch Jan. 1, 2018. It was approved today by the university's Board of Regents as part of the fiscal year 2018 general fund budget for the Ann Arbor campus.

"Today, our long-standing commitment to ensuring that qualified students from Michigan can afford a U-M education becomes a guarantee," said U-M President Mark Schlissel.

"The 'Go Blue Guarantee' cuts through the complexities of financial aid to help us reach talented students from all communities in our state. I have always believed that talent is ubiquitous in our society, but opportunity most certainly is not. The 'Go Blue Guarantee' helps us ensure wider opportunity."

The guarantee amplifies the university's long-standing commitment to meet financial need for all in-state students and it does not reduce any need-based aid for students from families earning more than $65,000. In fact, many in-state students from families earning up to $125,000 a year are awarded scholarships and grants that pay half their tuition.

The president thanked the Board of Regents and donors to the university for their support in eliminating financial roadblocks for students seeking to attend U-M.

"I must thank the members of the Board of Regents for their dogged commitment to access and affordability of a U-M education," he said. "They urged us to be bold, and the 'Go Blue Guarantee' could not have happened without their encouragement and support. And tremendous credit also goes to our generous donors whose philanthropic commitment to financial aid underlies the financing of the 'Go Blue Guarantee.'"

The "Go Blue Guarantee" provides four years of free tuition to students with a family income of up to $65,000, within certain asset limits. The $65,000 benchmark is roughly equal to the state's median family income of $63,893 (2015). These students also may be eligible for additional aid to cover non-tuition costs.

Interim Provost Paul Courant, the university chief academic and chief budget officer,
says the "Go Blue Guarantee" is based, in part, on first-year results of the HAIL (High Achieving Involved Leader) scholarship.

The HAIL effort found that targeted communication and simplifying the aid application process for high-achieving, low-income students markedly increased the number of those students enrolling at U-M. There were 262 HAIL Scholars in the fall 2016 freshmen class. The HAIL pilot is now in its second year.

U-M has long made financial aid a priority and again this year financial aid was increased by 9.5 percent ($15.3 million) in the general fund budget, bringing the total budget for need-based undergraduate financial aid to $176.7 million in the coming year.

This means financial aid in the coming year will more than cover the $424 increase in the most common lower-division, in-state tuition for the academic year that was approved in the general fund budget for fiscal year 2018. The university also provides need-based financial aid to out-of-state students and meets full financial need for those students from families with incomes up to $90,000 a year.

In-state undergraduate tuition will increase by 2.9 percent to $14,826 for the most common lower-division rate. Comparable tuition for out-of-state undergraduates will be $47,476, an increase of 4.5 percent. Tuition for most graduate programs will increase by 4.1 percent.

The undergraduate financial aid budget has increased 11.3 percent per year, on average, over the past decade. This compares to an average annual growth rate of 4 percent for in-state undergraduate tuition.

The university's generous need-based financial aid program includes all in-state students with financial need and typically includes Michigan families earning up to about $125,000 a year or more, depending on specific circumstances.

Courant explains that the university's sustained attention to providing need-based financial aid means today's students with financial need are paying less to attend U-M than students of a decade ago; that students are graduating with lower debt; and the average net price of attendance compares favorably with peer institutions across the nation. U-M has a six-year graduation rate of 90 percent, more than double the national average.

Courant, a noted economist and professor of public policy, says U-M's commitment to the "Go Blue Guarantee" is extraordinary for a single campus at a public university.

Comparable "tuition guarantee" programs—like those in California and New York—are statewide programs that leverage substantial state grants made directly to students. The average state grant received by students at UCLA, for example, exceeds $10,000 a year, compared to the average state grant for Michigan students of $715.

"This makes the U-M commitment of university resources even more remarkable and critically important for these academically talented, in-state students," Courant said. "We are making a commitment in order to make sure in-state students have access to the life-changing educational opportunities at a large research university like U-M."

In a comparison that includes more than 30 other state flagship universities, only the University of Virginia has a higher average than U-M for institutional aid provided to incoming freshmen. The data from 2014-15 show U-M provides $13,796 on average for those students.

The $2.05 billion general fund budget for the Ann Arbor campus was approved by the Board of Regents on a 7-1. Revenue includes an expected state appropriation of $314.6 million, up 1.9 percent; indirect cost recovery on research funding of $239 million, up 5.5 percent; $1.49 billion in revenue from tuition and fees, up 6.8 percent.

In addition to supporting the university's overall commitment to academic excellence and affordability, the approved budget provides new investments to enhance the student experience by expanding engaged-learning experiences and service-learning opportunities.

The budget devotes new funds to increase opportunities for students to collaborate with U-M's world-class researchers; undertake experiences to work, study and do research in international settings; and obtain real-world experience through internships, client-centered assignments and other immersive educational projects.

In the coming year, the university will launch a multiyear examination of large introductory undergraduate courses to explore how digital technology, evidence-based teaching methods and other approaches can boost student performance and enhance engagement. This promises to be a high-impact investment, because almost one third of the credit hours generated in any given semester are taken in large foundational courses.

The budget includes support for ongoing work related to the university's strategic plan for diversity, equity and inclusion; further investments in the biosciences; support for faculty to engage in public service; improvements in classroom technology; and adding more class sections with fewer than 20 students.

The total fiscal year 2018 operating revenue budget for the Ann Arbor campus, including Michigan Medicine, Athletics, University Housing, other auxiliary activities and programs supported by designated gifts and grants, is $8.4 billion. Separately, the Regents approved tuition and housing rates on the UM-Flint and UM-Dearborn campuses and a small increase in the student fee to support the University Health Service.

Gifts and other non-general fund sources are increasingly important to the university's financial health. Philanthropy is an essential component of the university's commitment to academic excellence and access and affordability. The university has another year remaining in its Victors for Michigan fundraising campaign, which already has raised more than $4 billion and is closing in on a sub-goal of raising $1 billion for student support.

University housing rates up slightly
Regents approved a 1 percent increase for residence hall and apartment rental rates for fiscal year 2018 to cover increased costs and an additional 2 percent increase dedicated to funding major renovations of housing facilities. With a number of residence halls still in need of renovation, the overall 3 percent increase will support future upgrades while offsetting the projected rise in day-to-day operating costs for all buildings.

The cost per student for a double room with a basic meal plan will total $11,198 for the fall and winter terms, an increase of $326. Need-based grant aid will mitigate this increase for students with financial need. Rental rates in Northwood Community Apartments for graduate students and students with families will increase by an average of 1 percent.

University Housing is a self-funded auxiliary unit of Student Life within the university. Over the past 10 years, University Housing has embarked on a program of substantial cost controls, reducing costs by $16.7 million.

Additional U-M benchmarks

  • Freshman retention rate: 97 percent
  • Six-year graduation rate: 90 percent
  • No. 1 U.S. public research university: $1.3B
  • No. 2 U.S. public research university: top-rated graduate programs
  • Earnings of U-M graduates after 10 years: nearly double the national average

 

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