BOT unanimously approves 3.9% tuition increase, $273.5M budget

Oakland University’s Board of Trustees (BOT) unanimously approved a tuition increase of 3.9% for Fall 2022 during a special meeting on Friday, July 1.

James Hargett, the university’s interim vice president for Finance and Administration, attributed this increase to inflation, research and instructional space needs and the maintenance of OU’s quality programs, competitive pricing and financial aid packages. 

The BOT additionally cited the university’s position as the recipient of the least state funding across Michigan’s 15 public universities as rationale for the increase.

“We tried to come up with what we considered to be an increase which was both average with respect to what the other public universities were considering, and one that would not overly burden our students and our families — and yet, at the same time, would allow us to begin to address some of the university’s needs to be able to offer students a high quality education,” OU President Ora Hirsch Pescovitz said.

Resident, lower level undergraduate students attending classes full-time will now pay $14,572.50 in tuition, up $547.50 from last year. For upper level residents, full-time undergraduate tuition is up by $630 for a total of $16,875 per year. This brings the average cost of attendance up to $15,723.75.

OU’s 3.9% increase in tuition is similar to increases announced earlier in June by other public universities in the state:

  • University of Michigan — 3.4%
  • Michigan State University — 3%
  • Wayne State University — 4.5%
  • Grand Valley State — 2.9%
  • Ferris State — 3.2%
  • Saginaw Valley State — 3.9%
  • Western Michigan — 3.85%

The approved general fund budget for fiscal year 2023 (FY2023) amounts to $273.5M in total and includes a $10.9M increase in expenditures. This increase will be spread out between a number of investments, including incremental costs toward salary and fringe benefits, utility costs and new academic programs. In reference to the latter, Hargett specifically highlighted the university’s recently approved physician’s assistant masters program, social work masters program and Bachelor of Science degree in nutrition.

In assembling this budget, the BOT accounted for a projected enrollment decrease of 8.8% and a $12.7M decline in net incremental revenue. These decreases are due in part to a shrinking pool of high school graduates — a crisis affecting universities statewide.

“The most important thing we can do is offer the highest quality education possible, and we work really hard to do that,” Pescovitz said regarding OU’s efforts to stimulate enrollment.

Among the main assets Pescovitz credits with making an OU degree valuable are the diverse array of internship opportunities offered to students and an average graduate salary of $58,000 — higher than both the state and national averages for graduates.

“It isn’t just that we offer an incredibly wonderful education – we really offer a great career,” Pescovitz said. “In addition, we offer excellent financial aid opportunities, and we are increasing the number of financial aid opportunities with scholarships, grants and work study opportunities — those kinds of things.”

OU received a significant $6.7M increase in state appropriations funding this year, for a total of nearly $60M. Pescovitz credited the Strive for 45 campaign with setting this increase in motion.

First introduced in 2020, ‘Strive for 45’ sought to establish more equitable state funding across Michigan’s 15 public universities through allocating at least $4,500 per fiscal year equivalent student in floor funding to each. In Friday morning’s approved budget, the state declared their intentions to increase floor funding at the five universities which previously received less than $5,000 by issuing them up to $4,500 over a three year period.

“That was due to very heavy advocacy at the legislative level,” Pescovitz said. “[For students,] it shows that when you advocate for something, and you do it in an aggressive way but also in a well thought out way, that you can change legislation — that you can make a difference.”

Aside from trustee Brian Calley’s inquiries regarding tuition rate projections for the coming years, the Q&A segment for this item concluded swiftly. The board members in attendance voted unanimously to approve the $273.5M budget and 3.9% tuition increase, and with no further items on the agenda, the meeting was adjourned in under 30 minutes.