Q. What is the “Go Blue Guarantee?”
A. The “Go Blue Guarantee” is a financial aid program for in-state students that offers a guarantee of free tuition for up to four years for students with family income of up to $65,000. The program – which includes families earning up to what is roughly the state’s median income – launched Jan. 1, 2018, and also offers tuition support for families with incomes up to $180,000. It was approved June 15, 2017, by the university’s Board of Regents for the Ann Arbor campus. Student who qualify for the guarantee also may be eligible for additional need-based aid to pay other college expenses. More details on how to qualify are available here: goblueguarantee.umich.edu.
Q. What is the current cost of tuition at the U-M?
A. The exact tuition rate a student pays varies by the school or college in which the student enrolls, the credit hour load of the student, and the student’s class standing. Another major factor is the amount of financial aid a student may be receiving. About 70 percent of in-state undergraduates receive some form of financial aid.
That said, the most common rate for in-state freshmen starting classes in fall 2020 is $15,948 for tuition and fees for the academic year.
Additional detail here:
Q. What does tuition money pay for at the university?
A. Tuition pays for the core academic mission of the university. That includes instruction, financial aid, academic advising, museums, libraries, computing centers and other services.
Q. What does tuition money NOT pay for?
A. Tuition dollars are not used to pay for these areas:
- Intercollegiate athletics.
- Student housing.
- U-M Health System.
- Student Publications.
- Most construction projects.
These are all self-funded areas of the university that generate their own funding and pay their own way. No tuition or tax dollars are used in these areas.
Q. Why is it necessary to raise tuition?
A. The key reason for increasing tuition is inflation and the long-term decline in state funding. Since 2001, U-M has become increasingly reliant on tuition to offset a declining share of revenue from the state appropriation, which is lower today than a decade ago.
The state appropriation for the 2019-20 academic year was $322.8 million and provided about 14 percent of the General Fund revenues for the year. In the 1969-70 academic year, the state appropriation represented 64 percent of the General Fund. By contrast, tuition and required fees for 2019-20 are 74 percent of the General Fund; in 1969-70, tuition was 26 percent of the General Fund.
Q. Why does U-M tuition go up each year?
A. Tuition helps support learning opportunities, quality teaching, undergraduate research experiences and the respected scholarship that make a U-M education one of the best in the world. Through aggressive cost controls and prudent fiscal management, we are committed to maintaining the high standards of the university and to supporting the priorities and initiatives that help prepare students for success. This includes investing in cutting-edge technologies, hiring leading professors in their fields and providing increasing amounts of financial aid.
Maintaining the excellence of our educational programs and ensuring access to the university for students from all economic backgrounds are U-M’s top priorities. Accordingly, we have consistently boosted financial aid each year for students with demonstrated need.
For the 2020-21 academic year, the university increased centrally awarded financial aid for undergraduates by 5.6 percent. That means that, for the eleventh consecutive year, the increase in financial aid offsets the increase in tuition rates for in-state students with financial need.
The annual appropriation from the state also plays a role in setting tuition and fees.
Q. What is U-M doing to help defray the high cost of higher education?
A. The university continues to increase financial aid funding and aggressively cut operating costs to protect the academic experience, even during this time of financial uncertainty created by the COVID-19 pandemic.
Increasing financial aid: The university remains committed to providing financial aid that makes a U-M education accessible for qualified students from all socioeconomic backgrounds. During the last 10 years, the university has increased financial aid by an average rate of 11.5 percent. During that same time period, the average annual tuition rate increase has been 2.9 percent for in-state lower division rates.
About 70 percent of undergraduate students who are Michigan residents and 50 percent of out-of-state students receive some form of financial aid.
Aggressively cutting costs: In the face of historic reductions in state funding, the university is saving tens of millions annually through such measures as reducing energy consumption, offering low-demand classes less often, leveraging IT to reduce costs and asking employees to contribute more to their health benefit programs.
The 2020-21 budget includes $102 million in cost savings that come from sacrifices shared among faculty and staff. Faculty and staff that are not part of bargaining units will see no increases in salary this year, and executive salaries were reduced. The university has also instituted a hiring freeze and has stopped travel and many categories of spending. The tuition rate would be higher without these efforts.
Utilizing endowment and reserves: This budget includes spending more than $400 million from our endowment, even though the value of the endowment will undoubtedly be diminished by the severe COVID-19 induced economic recession. The budget also calls for using reserves to cover an expected deficit due to the pandemic of at least $19 million.
All of this is being done carefully to preserve the high-quality teaching, service and research that contribute to the world-class education our students deserve and expect.
Q. Why doesn’t U-M spend less on athletics and lower tuition?
A. No tuition dollars are spent on athletics. The Athletic Department generates all of the funds necessary to pay for 100 percent of its operations. That includes all salaries, scholarships for student athletes, facility improvements and all operational expenses.
The U-M Athletic Department is one of only a handful of major university athletic departments in the nation to pay for 100 percent of its expenses. In addition, Athletics makes an annual contribution to the university’s fund for need-based financial aid for Michigan students who are not athletes and pays full tuition to the university for those student athletes attending on athletic scholarships.
Q. Why can’t the U-M use revenue from these self-funded areas to pay for academics and help keep tuition lower?
A. With very few exceptions, the revenue generated in these self-funded areas is required to be spent in those areas. Patient revenue at the U-M Health System must be used to pay expenses in the health system. Donors often specify how their gifts to the university be spent.
For example, the U-M endowment actually is a collection of more than 11,700 separate funds. About 20 percent of those funds are designated to support work at the U-M Health System and can only be used to support research, patient care or other purposes specified by the donors. About 22 percent of the endowment is specified for student financial aid.
Athletics does make an annual contribution to the university’s fund for need-based financial aid, in addition to paying for all athletic scholarships. It’s important to note that these areas are not supported by any tuition dollars.
Q. Why is tuition so much higher for students from outside the state of Michigan?
A. U-M is a public university that is supported by the taxpayers of the state of Michigan. While that state support has been declining over time, the U-M remains committed to its public mission of serving Michigan residents. Another way to look at the cost of tuition is that out-of-state students pay tuition that more accurately approximates the cost of instruction at the U-M. Students who are Michigan residents get a tuition discount because they and their parents pay taxes that are used to support the U-M and the state’s other public colleges and universities.
Q. Rather than raise tuition and increase financial aid, wouldn’t it be better for everyone to just reduce the amount of money spent on financial aid and keep tuition lower?
A. We believe financial aid is a key component of making the university accessible. Many qualified students would not be able to attend the U-M were it not for financial aid. Money used for financial aid also comes from a variety of sources. The Victors for Michigan fundraising campaign, which ended Dec. 31, 2018, raised $1.22 billion for student support.
Q. When you say about 70 percent of the U-M students from the state of Michigan receive some financial aid, what do you count as financial aid?
A. Financial aid is a term that has a common definition and is consistent across all U.S. colleges and universities. A typical financial aid package might include more than one type of aid. Financial aid can include:
Grants: Grants are gift aid from federal, state or university resources. They are awarded to students on the basis of need and do not need to be repaid.
Scholarships: Scholarships are largely gift funds that often are awarded to students with high academic achievement or special talents; they do not have to be repaid.
Loans: Loans are borrowed funds that must be repaid, with interest, after the student has completed school.
Work-study jobs: These jobs are available to students who have financial need. Under the work-study program, a percentage of a student’s earnings is paid through federal or state funds and the student’s employer pays the remainder.
Q. What other costs are associated with attending a school like U-M?
A. Typically the costs of attending college include tuition, room and board, books and supplies and personal items. Actual expenses will vary based on lifestyle and level of enrollment. For a resident freshman starting at Michigan in fall 2019, the total cost of attending was estimated to be $31,056. That included:
- Tuition & fees: $15,948.
- Housing & meals: $12,224.
- Books & supplies: $1,048.
- Personal & misc.: $2,454.
Cost of attendance calculator:
Q. Many references to tuition actually use the phrase “tuition and fees.” What are the fees?
A. Each student is assessed the following mandatory fees per full term:
- Registration: $80.
- Central Student Government: $9.19.
- Student Legal Services: $8.50.
- School and college government: $1.50.
- University Unions & Recreational Sports Facility Improvements: $65.
- Temporary fee for the 2020-21 academic year to defray some of the public health costs associated with the COVID-19 pandemic: $50.
A $202 health service fee and a $185 infrastructure maintenance fee are included in the tuition figure.
International students studying in F and J visa status are also charged a $500 fee per full term.
*NOTE: The amount of state support is estimated as the state government has not yet approved its budget for the next fiscal year.