How can Minnesota prosper as its supply of highly skilled workers dips in the next two decades? One good idea: Maximize the University of Minnesota's ability to attract brainpower from other states.
Start by reducing nonresident tuition to a competitively appealing price that still more than covers the cost of instruction, so that no Minnesota student is subsidizing one from another state. Then use that low price to lure gifted students — the sort likely to major in high-demand fields, graduate on time and fill Minnesota jobs. Along the way, they'll boost the University of Minnesota's academic reputation. Eventually and gradually, nonresident tuition can climb again as quality, not price, keeps out-of-state brainpower coming.
In a nutshell, that's the course set by the Board of Regents and then-President Robert Bruininks in 2008. It has worked like a charm.
Since 2008, when nonresident tuition was rolled back by a bold 36 percent, enrollment of undergrads who pay nonresident tuition has nearly tripled, even as Minnesota residents' share of the student body held steady. (The cohort that shrank: students from Wisconsin, Iowa, North Dakota and South Dakota, who pay resident rates under reciprocity agreements.) Annual revenue derived from nonresident tuition has almost quadrupled, easing financial pressure on the entire institution. The university's national visibility, diversity, retention and graduation rates are all up as a result.
Best of all, out-of-state students have continued to come in bigger numbers even as the university started raising nonresident tuition again in 2012. It returned last year to nearly its pre-2008 level. Rapid growth in that student cohort slowed slightly last year, suggesting a need for caution in raising prices further.
Staying the course on a policy so successful ought to be a no-brainer. But it was the topic of a 90-minute debate and garnered a tepid 8-4 vote of support from the Board of Regents on Wednesday. President Eric Kaler's recommendation for a 7 percent boost in nonresident tuition and a 1.5 percent increase in in-state rates for 2015-16 was challenged by two amendments, neither successful, seeking a bigger hike in nonresident rates and either a freeze or cut for Minnesota residents.
The amendments were in keeping with the urging of eight majority-Republican members of the state House's higher-ed funding committee. In a letter to the Board of Regents on Tuesday, they argued that higher nonresident tuition would generate enough revenue to reduce the tuition load borne by Minnesota-residing students.
That's a shaky argument. An abrupt boost in nonresident tuition could also send such students elsewhere. An out-of-state enrollment dip could shrink rather than increase revenue. It could send retention and graduation rates the wrong way, since today's nonresident students outperform the U's resident students academically. And it could give Minnesota a reputation for tuition unpredictability that would undermine the positive recognition it has recently acquired.
None of that might matter greatly to Minnesota's economic future if this were 1965, with the baby boomers entering college and no brainpower shortage in sight. With today's demographic forecast, it matters much — though one might not know that part of the story from listening to last week's tuition debate. The importance of the University of Minnesota as a talent magnet was only briefly mentioned. Rather, critics seemed to be operating under the assumption that with resident tuition rates relatively high and nonresident rates the lowest in the Big Ten, resident students must be getting a raw deal.
It's telling that no student pleaders joined the critics in making that case. They likely know better. Bringing more students from outside the Upper Midwest to their campuses has been both an educational and a financial plus. It's also helping to secure the prosperity of the state where a majority of them will work and live for decades to come. Regents and legislators would do well to keep their eyes on that long-term prize, too.