MSU officials pledged Tuesday to keep tuition no higher than the rate of inflation in exchange for fewer state cuts to higher education this year and no further cuts in 2004-05.
Because the current rate of inflation is 2.4 percent, the tuition increase for fall 2004 will be at least that figure. If the deal is carried out, the tuition increase could be the lowest it's been in about five years.
The resolution passed unanimously Tuesday at a special meeting of the MSU Board of Trustees.
Under the agreement, Gov. Jennifer Granholm will reduce the originally proposed cuts to higher education from 5 percent to 2 percent.
MSU President M. Peter McPherson stressed during the meeting that the deal isn't something that will happen each year.
"We've got a unique situation here," McPherson said. "It's important for the university to act independently, but in extra difficult financial times, discussions like these are going to occur."
Granholm announced the agreement in her State of the State address Tuesday night.
"We must do all we can to make college more affordable and accessible to all who want to attend," she said, adding that MSU was the first Michigan university to accept the proposal.
In her address, Granholm said the president of Wayne State University already has suggested a similar agreement to the school's board.
But even with fewer cuts to higher education, MSU still faces $20 million in reductions for 2004-05.
"The reductions will still be substantial," McPherson said. "It's clearly better than other options that we were faced with.
"But this doesn't cure all."
The board raised tuition for the 2003-04 academic year by 9.9 percent and by 8.5 percent the year before.
This isn't the first time the university has resolved to keep tuition no higher than the rate of inflation. In 1994, MSU administrators created the Tuition Guarantee, where tuition increases were kept at an average at 2.8 percent until 2001-02.
Although the current bargain is reminiscent of the Tuition Guarantee, McPherson said it's a separate resolution.
"That was an era when the finances of the state were more solid," he said.
Trustee David Porteous said the agreement will help the university, as well as higher education, in the future.
"I hope, once again, this sort of reaffirms the partnership between the state of Michigan and MSU," he said, via conference phone at the meeting.
But some trustees wanted assurance that MSU won't continue to rely on the state in the future.
"It's appropriate for the university to be setting tuition and not have this process happen all the time," Trustee Scott Romney said.
Education senior Monique McConnell said the lower tuition increase will benefit incoming students, much like the Tuition Guarantee helped her when she arrived at MSU.
"If we can get that 2.4 percent going for several years, it'll help," she said, adding that she will be paying MSU tuition next year as she finishes her bachelor's degree. "It'll feel really good to know that I'll get a financial break."
But Trustee Dee Cook said students should realize there still will be cuts to the university.
"They've got to understand that this isn't the end of this process," she said. "This is just the beginning. We do have to recognize how serious the budget problem is in the state."
Both Granholm and the university took a large step in making the deal, Trustee Colleen McNamara said.
"I do think we need to applaud the governor for taking this initiative," she said. "I hope that she has the strength and resolve to help us keep this deal."
Amy Bartner can be reached at bartnera@msu.edu.
