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Fewer nonresident students coming to the U of M after tuition hikes

The University of Minnesota is reconsidering how much it can charge its nonresident students.

The University of Minnesota is reconsidering how much it can charge its nonresident students. Glen Stubbe, Star Tribune

Over the last four years, the University of Minnesota has raised tuition for nonresident students -- that is, anybody who doesn’t live in Minnesota, Wisconsin, the Dakotas, or Manitoba -- by nearly half.

President Eric Kaler and his Board of Regents decided they were ready to bump that figure up another notch. The university’s nonresident tuition of over $30,400 is, after all, low for a Big 10 school. (Northwestern University is top of the heap at $54,600 and climbing.)

If out-of-staters look like a revenue stream for the U, there's just one problem: There’s been a 26 percent drop in new nonresident students this fall.

Last year, after Kaler and the board hiked up tuition 15 percent, the number of nonresident newcomers fell from more than 1,350 to a little over a thousand. To the university, that’s the difference between making $28.5 million and $23.7 million, according to the Duluth News Tribune.

University officials didn’t respond in time to interview requests, but a report from the Board of Regents notes the drop. Competitor institutions, it says, have “clearly provided more aggressive discounting in order to bolster their nonresident enrollment.”

Nonresident enrollment at the University of Minnesota may look cheap among Big 10 peers, but it used to be even less expensive. In 2007, the university dropped tuition for newcomers from over $20,100 to $12,500 in an attempt to attract more nonresidents -- some of the university’s highest ACT/SAT scores come from out of state -- and it worked. Applications from out of state surged, enrollment got more competitive, and the average ACT score shot above 28.

Since 2015 or so, the university has been boosting its tuition back up, ostensibly to be more competitive with the rest of the Big 10 crowd. But if the nonresident market cooling off tells us anything, it’s that there’s a limit to how much students are willing to spend.

Tuition overall has been skyrocketing for the past 20 years. College Board’s 2017 report found that, adjusted for inflation, the average student attending a public four-year institution in 1987 paid about $3,200 in tuition. In 2017, that number swelled to nearly $10,000. American students are currently drowning in some $1.4 trillion in student loan debt.

So students are doing what they can to mitigate costs, and for more and more of them, that means staying closer to home. A 2017 Sallie Mae/Ipsos survey on how American students pay for college found that about 73 percent of students opted for in-state colleges -- up 3 percent from the previous year.

Kaler hears these students loud and clear, and has adjusted his plans. Instead of raising tuition by 15 percent, he’s proposing they opt for a modest 10 percent.

It’s a sacrifice the university is willing to make to keep attracting the best and brightest -- as long as they’re still willing to pay.