Michigan Universities Implement Tuition Hikes Amid Funding Challenges

Tuition Increases at Michigan Universities Amid Funding Uncertainties

Both the University of Michigan and Michigan State University are raising tuition in response to ongoing financial uncertainties and fluctuating state and federal funding. This decision has been influenced by a mix of declining federal support, a downturn in international student enrollment, and various economic pressures.

During a recent board meeting to discuss financial strategies, MSU Trustee Mike Balow commented on the difficulty of deciding to increase tuition, stating, “No increase [to tuition] is ever taken lightly, but in light of everything going on, it seems that we struck the balance here.” Trustee Sandy Pierce also noted that factors such as inflation and rising employee health insurance costs played a significant role in the financial assessment.

Details of Tuition Adjustments

Here is how tuition is set to change for each institution:

University of Michigan

• 3.4% increase for in-state undergraduate students, translating to about $610 more per year.

• 4.9% increase for out-of-state undergraduate students, amounting to approximately $3,016 additional annually.

• 4.9% increase for most graduate programs, though costs may vary based on specific courses.

• No increase will be implemented for students who qualify for need-based financial aid.

Michigan State University

• 4.5% overall increase, expected to add about $798 to each student’s annual tuition.

• This increase may be subject to revision based on potential state legislation regarding tuition caps.

Concerns Over State Funding

Concerns regarding state funding are exacerbating the financial landscape for both universities. A recent proposal from the Michigan House proposes cuts of $224 million to the University of Michigan and $56.6 million to Michigan State University. The intention behind these cuts is to reallocate funds to the state's other 13 public universities.

The budgetary planning for these universities reflects different strategies: U-M has based its projections on the assumption that state funding will align with levels from 2025, while MSU has taken cues from a more conservative estimate outlined in the Senate budget.

State funding represents approximately 12% of U-M’s general fund, while MSU relies on state grants, tuition, and fees for nearly half of its operational budget. As Chris Kolb, U-M's vice president of government relations, expressed, the proposed cuts “significantly detracted from the university’s support.”

Controversial Budget and DEI Programs

Meanwhile, Representative Ann Bollin (R-Brighton), who chairs the House Appropriations Committee, has raised concerns over the focus on diversity, equity, and inclusion (DEI) initiatives within the universities. The House budget includes a provision that seeks to withdraw state funding allocated for DEI programs.

The student demographics indicate a strong representation of local residents, with MSU reporting that 72% of its students were Michigan residents in the Spring of 2025, and U-M noting that 52% of its undergraduates in the Fall of 2024 hailed from Michigan.

The budget proposal will soon be under consideration in the state Senate, as universities brace for the financial implications of these legislative decisions.