Several members of the University of Minnesota’s governing board voiced support for the proposal to charge business undergraduates $2,000 more than their classmates. They had questions, too. One student representative expressed concern that it would create a burden on families at a difficult time.

At a meeting Thursday, the interim dean of the Carlson School of Management, Sri Zaheer, described the reasons she believes the so-called tuition surcharge is necessary to maintain quality and compete with peer business schools.

She said that Carlson students get a “lot of private benefit” from their education, including a median starting salary of $50,500 in 2010. Carlson students are also less likely to borrow for their education than their U counterparts, she noted. Regents reviewed figures of massive growth in applications to the selective school.

In order to educate an expanding number of students, Zaheer hopes to hire 20 new faculty members, paid for through the $4.9 million in new revenue from the tuition surcharge.

She has proposed phasing that charge in over several years. By 2015-16, students would pay $2,000 more a year. That’s on top of any additional tuition increases over that time.

Zaheer said that the need for faculty is acute. Carlson has 104 tenure or tenure-track faculty members for a total of 4,800 undergraduate and graduate students. Michigan, for example, has 148 tenure faculty for its 3,200 students, she said.

“I can say that we are more much efficient, we do better with less,” Zaheer said. “But at the same time, we have outstanding students and they deserve the very best education we can provide.”

Terrance Paape, a student representative to the board, said that $1,000 a semester is a huge figure for some students. He noted that in today’s economy, student loan default rates are up and family incomes are down.

“What are you going to do to address issues of access?” he asked.

Zaheer said that for Pell-eligible students, the university “will find a way for them to meet this need" with grants and scholarships. She said that might come in the form of a waiver, but it sounded like that hadn’t been decided.

Regent Dean Johnson asked Zaheer what proportion of the $4.9 million would be spent on faculty, versus scholarships. Those are the two areas U leaders have promised the surcharge would fund. Zaheer said that actually, no part of that $4.9 million would go toward scholarships. The U would fund them through private funds and other means. All of the $4.9 million would go toward faculty, she said.

Several regents asked whether this new surcharge would create a precedent for other colleges within the university.
Here are Regent Laura Brod’s thoughts on that issue:

When I look at the Carlson proposal, it seems to me that it’s a unique situation. It’s trying to solve a unique problem. I certainly would hope that this doesn’t set that precedent.

I wouldn’t necessarily look warmly at a bunch of other proposals in this regard.

[If several colleges impose their own surcharges] all you’re really doing is increasing the base. And that would concern me.