Tuition Hikes at Michigan’s Major Universities Amid Funding Uncertainty
Facing uncertain state and federal funding, both the University of Michigan and Michigan State University have decided to increase tuition fees. This decision comes in response to various financial pressures impacting these institutions.
Budget proposals from the universities highlight several cost-driving factors. Among these are reduced federal support and decreased international student enrollments due to federal policies. “No increase [to tuition] is ever taken lightly,” said MSU Trustee Mike Balow during the board meeting where the tuition hike was approved. “But in light of everything going on, it seems that we struck the balance here.”
Trustee Sandy Pierce noted additional financial challenges, citing inflation, tariffs, and rising health insurance costs for employees as contributing factors.
Tuition Adjustments
Here are the specifics of the approved tuition increases for each university:
University of Michigan
- 3.4% increase for in-state undergraduate students (approximately $610 annually)
- 4.9% increase for out-of-state undergraduate students (approximately $3,016 annually)
- 4.9% increase for most graduate students, though costs vary by program
- No increase for students receiving need-based aid
Michigan State University
- 4.5% universal increase (approximately $798 per year)
- Trustee Sandy Pierce mentioned that this figure is subject to change if the state Legislature decides to lower the tuition cap.
State Funding Concerns
State funding remains a significant concern for both institutions. Recently, the state House approved a higher education budget that involves a reduction of $224 million in funding for U-M and $56.6 million for MSU. The redirected funds are intended for the state’s other 13 public universities.
Both universities have not accounted for these potential cuts in their budgets. U-M’s budget anticipates the same state appropriation as in 2025, while MSU’s budget aligns with a less severe state Senate proposal.
State funding constitutes approximately 12% of U-M’s general fund budget, according to a press release, and supports nearly half of MSU’s operational budget as per their budget proposal.
A statement from MSU underscored the importance of state funding: “MSU educates more Michigan residents than any university in the state and prepares them to lead in every sector of our economy.” The potential budget cut by the House could impair the university’s ability to provide affordable, quality education.
Chris Kolb, vice president of government relations at U-M, expressed similar concerns. “The proposed House budget is deeply disappointing and would dramatically reduce support for the University of Michigan — an institution that delivers exceptional value to our state,” he stated.
Representative Ann Bollin (R-Brighton), chair of the House Appropriations Committee, criticized the universities for excessive investment in diversity, equity, and inclusion (DEI) programs at the expense of local students. The House budget includes a provision to reclaim state funds allocated to DEI initiatives.
MSU data indicates that 72% of its students enrolled in Spring 2025 were Michigan residents, while 52% of U-M Ann Arbor’s undergraduates in Fall 2024 hailed from Michigan.
The budget proposal now moves to the state Senate for further consideration.
