News Story

The Board of Regents approved a $3.1 billion fiscal year 2027 general fund budget for the Ann Arbor campus on June 25, investing in research and student support services, while also increasing financial aid to ensure that students with need see no increase in the cost to attend the university.

“This proposed balanced budget reflects disciplined stewardship in a challenging environment,” said Provost Laurie McCauley, who presented the budget at the regents meeting. “It protects our most financially vulnerable students, invests strategically in our academic and research mission and positions the university to remain resilient as external conditions continue to evolve.

“This budget is a result of a true campus-wide partnership to steward our resources and advance our mission,” she added.

RELATED STORIES

• UM-Dearborn budget approved at regents meeting
• UM-Flint budget grows 9.6% on strength of enrollment gains
• Michigan Medicine reports positive financial performance
• Athletics projects balanced budget for FY ’27

Leaders across campus worked to shield students from the effects of state and federal budget cuts while preserving investments in the university’s core teaching, research and service missions. As part of these efforts, U-M schools, colleges and units carefully reviewed their spending and identified more than $38 million in cost-savings and reallocations so the university could minimize the impact on tuition and fees.

As a result, the proposed increase in tuition and fees for resident undergraduates is just 3%. Non-resident undergraduate students and most graduate programs will see an increase of 4.9%, with housing rates increasing by 6%, which supports the long-term plan for improving student housing.

The budget for the Ann Arbor campus is part of a university-wide budget package that includes spending plans for Michigan Medicine, UM-Dearborn, UM-Flint, Athletics, Michigan Housing and supplemental student fees.

Access and affordability: A commitment to Michigan families

In crafting next year’s budget, which goes into effect July 1,  university leaders prioritized support for the Go Blue Guarantee, U-M’s signature program that ensures that high-achieving Michigan residents can access a world-class undergraduate education, regardless of their financial circumstances.

Established in 2018, the program initially offered free tuition for students on the Ann Arbor campus from Michigan families with annual incomes up to $65,000. Over the years, the program’s budget has grown by $191 million and the Guarantee expanded to include students on the Flint and Dearborn campuses and families with up to $125,000 in annual income and $125,000 in assets. Today, the University of Michigan’s Go Blue Guarantee is the most generous public-university tuition guarantee program in the country.

Nearly three-quarters — 72% — of resident undergraduates receive financial aid, with more than a third of them paying zero dollars in tuition. Most Michigan residents graduate from U-M with no debt, giving them greater financial flexibility as they launch their careers.

President Domenico Grasso said expanding access to higher education is one of the university’s most important investments in Michigan’s future.

“This is how we remain an economic engine for our state, making the most prestigious education also the most accessible,” Grasso said. “This is how we invest in social mobility and in our collective future.

“The true health of a democratic society is reflected in how the bottom 50% fare at the supermarket rather than in how the top 10% fare in the stock market,” he said.

Overall, university leaders assigned more than $335 million to undergraduate grant aid in the FY ’27 budget, an increase of 3.8%, or $12.3 million. Because the rate of increase in aid is greater than the rate of increase in tuition (3.8% vs. 3%), resident undergraduates with financial need will see no change in their cost.

When adjusted for inflation, families with annual incomes up to $120,000 will pay a net price today that is less than families of similar means paid a decade ago.

Research to serve the world

The FY ’27 budget also protects the university’s core research mission, enabling U-M research laboratories in Ann Arbor, Flint and Dearborn to continue pursuing ideas that can become new technologies, therapies or innovative solutions to everyday challenges.

In the last year, the university launched 10 Impact Institutes that promote interdisciplinary collaboration and include researchers from 17 U-M schools and colleges — including units that don’t traditionally engage in research, such as MDining and Michigan Recreation.

These new institutes are already working to develop new materials to meet rising electrical demand, while also advancing policy solutions for nutrition insecurity and creating sustainable plant fibers for textiles and building materials.

With $200,000 in seed funding from the Strategic Initiative Fund, the institutes are translating research into action that will improve lives in Michigan and around the world, and are well-positioned for long-term sustainability and external funding. In the next year, 10 additional Impact Institutes will be selected to receive university seed funding.

Investing in every student

Every August, students come to U-M from every county in the state, every state in the U.S., and dozens of other countries. The university budget is designed to offer holistic support to each one of these students by investing in physical and mental well-being, in addition to their academic success.

In FY ’27, U-M will continue to expand innovative services and programs in support of student mental health.

“Students want support that meets them wherever they are and whenever they need it, and that access is critical to helping all of our students thrive,” said Martino Harmon, vice president for student life.

This year, students also will be able to play, train and relax inside the new Hadley Family Recreation & Well-Being Center — a 200,000-plus-square-foot facility that opened June 17. The state-of-the-art center offers space for basketball, volleyball, racquet sports, indoor rock climbing and bouldering, as well as a mind and body studio.

To strengthen the connection between students and their academic advisers, U-M is also creating a user-friendly, one-stop shop called the Student Success & Advising Technology Platform that makes communicating and tracking academic progress easier. LSA will pilot the platform in FY ’27, laying the groundwork for broader implementation across the university the following year.

Financial stewardship

Like many universities across the country, U-M is navigating rising costs and uncertainty surrounding state and federal funding. Those challenges were compounded this year because the university needed to develop its FY ’27 budget before the state legislature finalized the appropriations bill that determines funding for Michigan’s public universities.

U-M leaders made plans as if the state appropriation would remain the same as last year, which in a time of inflation effectively means a budget cut. Even in this challenging environment, the FY ’27 budget continues to invest in the priorities that matter most: expanding access, supporting students and advancing research.