Credit University of Minnesota President Eric Kaler with willingness to adapt to adverse results. When last year’s 15 percent increase in nonresident, nonreciprocity undergraduate tuition rates led to disappointing recruitment results, he rethought his recommendation for another 15 percent boost next year. His new recommendation for those students in 2019-20 is a 10 percent hike.
The university’s Board of Regents should applaud Kaler’s adaptability, then go further. A smaller increase, say in the low single digits, or no increase at all should be set for the coming academic year. That might undo some of the damage that three years of disproportionately large nonresident tuition increases (7 percent, 12.5 percent and 15 percent) have done to Minnesota’s previously advantageous position in the highly competitive market for talented students from outside the Upper Midwest.
Keeping nonresident tuition low among the U’s Big Ten peers was a smart strategic choice by the Board of Regents a decade ago. It positioned the university to keep admissions numbers up and academic standards high as the millennial generation gave way to a smaller Gen Z cohort in the Upper Midwest. At the recommendation of then-President Robert Bruininks, the regents whacked nonresident, nonreciprocity tuition by about a third. By 2017, enrollment of students from outside the region had more than doubled, boosting net revenue from that source by about $100 million per year.
Despite the nonresident tuition policy’s success, the regents began to reverse it in 2015. Republican legislators and several regents argued that it worked to the disadvantage of students from Minnesota. In fact, the student cohort that shrank as nonresident enrollment increased was from the U’s “reciprocity” states, Wisconsin, North Dakota and South Dakota, not from Minnesota. The resident share of the U’s student body held steady at about two-thirds.
The downside of changing course became apparent this year. It brought a 26 percent drop in nonresident, nonreciprocity undergraduate enrollment, from 979 to 726 students. The tuition boost allowed net revenue from that cohort to still grow modestly this year over last. But financial aid and recruitment costs for students from outside the Upper Midwest are up nearly 40 percent since 2015-16.
Those are worrisome trends, especially because they are ill-timed. Now and in the coming decade, Minnesota needs its flagship university to serve as a magnet for talent from other states. A demographic dip in the growth of the state’s working-age population is coinciding with the knowledge-based economy’s demand for more highly skilled workers.
Attracting more bright students to the U can help meet that demand, since a large share of Minnesota college graduates — nearly 7 of 10, according to a 2016 study — remain in the state after graduation.
The Board of Regents — a body elected by the Legislature — would do well to set the U’s tuition policies with the state’s talent needs in mind. If it does, it will throttle back Kaler’s request for a fourth year of major increases for students from states outside the Upper Midwest.