The University of Minnesota's Board of Regents raised concerns Thursday about raising tuition at the school's five campuses, particularly those in rural areas where enrollment has been falling.

As part of her fiscal year 2023 budget plan, U President Joan Gabel has proposed a 3.5% tuition hike for undergraduate students at the Twin Cities and Rochester campuses, and a 1.75% increase for those enrolled at the Duluth, Morris and Crookston campuses. Annual tuition rates for Minnesota resident undergraduates would increase more than $400 at the Twin Cities and Rochester campuses and by about $200 at the Duluth, Morris and Crookston campuses.

Several regents were particularly worried about raising tuition at the U's greater Minnesota campuses, which have experienced enrollment declines in recent years. The Duluth, Morris and Crookston campuses face "significant" budget shortfalls this year, administrators said. Gabel's plan includes a one-time $7.5 million to help balance their budgets.

"If we raise their tuition, their fees, their food, their housing costs, and enrollment goes down further, we just created a bigger problem for ourselves," Regent David McMillan said.

The U will ask administrators at the Duluth, Morris and Crookston campuses to present ideas for revenue growth and cost reductions over the next year.

Regent James Farnsworth urged university leaders and his fellow board members to consider tuition reductions at the regional campuses to make them more competitive with comparable institutions in neighboring states.

"It's a topic of conversation that I hope we have as a board moving forward," Farnsworth said.

U leaders noted the proposed tuition increases are well below the current inflation rate, and that tuition went up just 1.5% in last year and was frozen the previous year.

For out-of-state students attending the Twin Cities campus, the 3.5% tuition hike would amount to $1,124. Graduate students at all five campuses would see their tuition rise 3.5%, a $624 increase for resident students and a $966 increase for nonresidents.

U leaders also want to raise the price of campus housing and meal plans in the next academic year and proposed increases ranging from nearly 3% at the Rochester campus to 8% at the Duluth campus. Under Gabel's proposal, annual room and board rates would increase $690 at Duluth, $540 at the Twin Cities, $458 at Morris, $353 at Crookston and $324 at Rochester.

The number of students living in campus housing plummeted at the start of the pandemic, but occupancy rates are rebounding, U budget director Julie Tonneson said. The Twin Cities campus is projected to fill 94% of its dorm rooms next academic year, she said.

"They're facing significant cost increases for labor, some utilities and, particularly, food," Tonneson said of the residence halls.

The tuition and housing rate increases would help pay for investments in employee compensation, infrastructure and core operations. Gabel is proposing merit-based salary increases of 3.85% for U employees, which Tonneson said is the highest compensation increase in at least 12 years.

Emily Kurtz, a student representative to the regents, said she was disappointed that the salary increases, which graduate student workers also would receive, would not be across the board.

"I've been here for five years, and things have only really gotten worse in those five years for graduate students like me," Kurtz said. "Lots of things are pretty expensive, and they're only getting more expensive."

Regents Vice Chair Steve Sviggum asked Tonneson how many people have contacted her with praise for the proposed budget.

"Zero. No one," she replied.

"So, no one has really come forward and said we love this budget, which to me, tells me that it's probably a pretty good balance," Sviggum said. "We used to say that if nobody was totally happy with an agreement, the agreement was probably pretty good."

Regents will vote on the proposed budget in June.

Cal Mergendahl, another student representative to the regents, warned board members that raising tuition would "only worsen some of the deeper issues that we're facing."

He said the increase would not help students who are struggling to afford their education nor make the Legislature more inclined to fulfill the U's state funding requests.

"We are asking [lawmakers] for hundreds of millions of dollars at the same time we're about to put another burden on college students and their families in a time of continuing economic crisis," Mergendahl said.