Students enrolled at a Minnesota State college or university this fall will pay an average of about 3.4% more for tuition after the system's board of trustees approved an increase Wednesday.

The public college system's $2.5 billion budget for the coming year is balanced using the additional tuition dollars, internal reallocations and more than $200 million in federal COVID-19 relief funding. Minnesota State colleges and universities had just increased their tuition 3% this past spring semester.

"Colleges and universities have done a great job to this point of managing these [pandemic] uncertainties and being able to utilize federal funding to help cover some of these lost revenues," said Bill Maki, Minnesota State's vice chancellor for finance and facilities.

Average annual tuition will rise to about $5,740 at Minnesota State's 30 community colleges and $8,900 at its seven universities. After financial aid is applied, most community college students will pay about $1,500 for the year while university students will pay around $3,650.

System officials said they expect revenue from campus housing and activities to rebound this fall as colleges and universities resume most of their operations in person.

The budget for the coming year accounts for an expected 2% enrollment decline across the system. Community colleges are projecting their enrollments will drop 1% while universities are anticipating a 4% decrease, Maki said.

Winona State University President Scott Olson said system institutions are in a tough position, with their finances still recovering from the pandemic and concerns about future enrollment declines. Still, he acknowledged most students will likely be disappointed by the tuition increase.

"We would all like to see a fully funded tuition freeze," Olson said, adding that the Legislature did not provide enough funding for the system to do that.

Mike Dean, executive director of the community college student association LeadMN, argued that Minnesota State could have afforded a tuition freeze after receiving hundreds of millions of dollars in federal COVID-19 relief funds as well as a $56 million funding boost from the Legislature.

"This is one of the largest increases in tuition we've seen in almost a decade here, and it's really going to have a negative impact on students who are already struggling from the pandemic," Dean said. He also criticized trustees for not letting student leaders testify during the board meeting.

Students will get some financial relief to help offset the tuition hike, as lawmakers approved changes to increase the average annual state grant award.

Minnesota State colleges and universities also estimate they will distribute some $180 million in federal COVID-19 relief grants to students in the coming year; the federal funding came with conditions that some of it must be spent on student aid.

Trustee George Soule questioned why Minnesota State chose to raise tuition at a higher rate than the University of Minnesota, which just approved a 1.5% increase.

Administrators responded that tuition revenue makes up a greater percentage of Minnesota State's budget than it does for the U.

And they noted that system universities remain cheaper to attend.

"There is a substantial differential between the tuition charged by them and the overall tuition charged by us," Minnesota State Chancellor Devinder Malhotra said.

Ryan Faircloth • 612-673-4234