Undergraduate tuition at the University of Minnesota will rise for the first time in three years for state residents, under a budget proposal announced Friday by President Eric Kaler.

The proposal would boost tuition by 1.5 percent in the wake of a failed effort to persuade the Legislature to underwrite a full tuition freeze.

Under Kaler’s proposal, the sticker price at the Twin Cities campus would grow by $180 to $12,240, for Minnesota undergraduates.

The in-state tuition rate has not changed since 2012, when tuition was frozen under an agreement between the university and state lawmakers.

Last fall, U officials offered to extend the tuition freeze for two more years in return for a $65 million increase in state funds. But last month, lawmakers approved only $22 million for tuition relief over the next two years.

That’s not enough to cover rising costs, Kaler said, and that’s why the U must ask students to pay more.

But even with the tuition hike, officials estimate that 42 percent of in-state students won’t have to pay any more out of pocket than last year, thanks to a boost in financial aid programs.

That includes families earning up to $100,000 a year, Kaler said. For students from those families, he said, the university offers a Promise scholarship that would “mitigate” the tuition hike.

And low-income students may well see their out-of-pocket costs go down, he noted, because increases in federal and state grants will more than offset the proposed tuition hike.

‘Already unmanageable’

Joelle Stangler, a 20-year-old junior from Rogers who is the student body president, acknowledges that a $180 increase may not sound like much. But she was clearly frustrated that the Legislature wouldn’t provide enough funding for a freeze, especially when the state was running a surplus.

“That $180, that’s less than $20 a month,” she said. “Our middle-income student is going to be able to bear that.” But many others, she notes, already struggle to pay the current tuition. For them, “it’s not an increase from a manageable level. It’s an increase from an already unmanageable level.”

The steepest increase would fall on nonresident undergrads, who would pay 7 percent, or $1,350, more next year, boosting tuition to $20,660 a year.

But State Rep. Bob Barrett, who serves on the House higher education committee, says the U could spare Minnesota residents a tuition hike if it asked out-of-state students to pay even more.

“We’re subsidizing nonresident tuition,” said Barrett, a Republican from Lindstrom. “Nowhere else in the Big Ten is there such a discrepancy between the exorbitant rate charged to in-state students ($3,330 above the midpoint) and the inexplicably low tuition rate charged for nonresidents ($8,440 below the mid-point).”

Barrett added that it was inappropriate, “and appalling really,” to increase tuition “on the back of Minnesota kids.”

Kaler said that he agrees the U can and should raise nonresident tuition, which is now the lowest in the Big Ten, but not as dramatically as some lawmakers wished. “We feel it’s appropriate for us to move closer to the middle,” he said. But “we’re clearly not going to do that in one step.”

Under his budget proposal, room and board rates, which vary by campus, also will go up about $150 to $200 a year.

Graduate and professional students will see tuition increases of up to 3.5 percent for Minnesota residents, and 4.5 percent for nonresidents.

The Board of Regents is scheduled to discuss the tuition proposal next week.