The University of Minnesota is increasing tuition at its five campuses as part of a $5.1 billion annual budget approved by the Board of Regents this week.

University leadership said it needed to raise rates due to growing costs tied to inflation and “flat state investment.” The U got less than the $45 million it requested from the Legislature this year, and an expected decline in enrollment could also present future budget challenges.

Next year, students at UMN’s Twin Cities and Rochester campuses will pay 4.5% more in tuition. At the Twin Cities campus, an undergraduate student will now pay $15,148 — $652 more than last year.

“No one likes to see tuition increases, and that conversation to me goes hand in hand with maintaining quality, and we are a high-quality system,” said Regent Mary Davenport ahead of the board’s Thursday vote to adopt the new rates. She said she views the tuition increase as a reasonable share for students.

Crookston, Duluth and Morris students will pay 1.5% more tuition, and non-resident students from states without reciprocity with Minnesota will see an increase of 5.5%. In-state students at the Duluth campus will pay $12,958 each year. Crookston’s annual tuition will be $11,648 and Morris’ will grow to $13,130.

Tuition changes will bring in an additional $42.2 million, according to U budget officials.

The increases for Twin Cities students are the highest in more than a decade, and come after a 3.5% undergraduate student tuition hike for Twin Cities and Rochester and 1% for the three other campuses in 2023.

The year before saw hikes of 3.5% for the Twin Cities and Rochester and 1.75% for the three other campuses. Increases for Twin Cities students in 2022 were the highest in a decade.

Regent Bo Thao-Urabe said she worried the new budget places the burden on students to cover growing costs as the U expects enrollment to decline in coming years.

“I’m very concerned about that projection and that we’ll continue to go to students for this increase,” she said. “That is probably what gives me the greatest pause.”

The board approved the tuition increases 9-3 Thursday in its finance and operations committee, with Thao-Urabe among the members who voted no.

The U’s new budget makes a total of $13.7 million in cuts, with most of that tied to reducing overall compensation. Those reductions will mean eliminating faculty and staff positions through natural attrition, hiring replacement employees at a lesser salary than previous employees, and reducing appointments.

A remaining $2.1 million in cuts will come from cutting operating expenses like supplies, professional development and travel.

Other system employees will see raises. Most employee groups are receiving merit-based increases averaging 3%. Union employees are getting pay increases averaging 4%. Student minimum wage is rising to $15.25 an hour, and civil service, professional and administrative employees are getting a new salary floor of $20 an hour.

There are also $1.4 million in funds to cover half of the reduction in state grant aid for undergraduate students whose families make between $80,000 and $120,000 a year.

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