Tennessee State trustees back 6% tuition increase as university faces roughly $39 million deficit

Tennessee State University's finance committee recommended a 6% increase in maintenance and mandatory tuition and fees for 2025'1, and approved motions to forward both the university's FY2024'025 estimated budget and the FY2025'026 proposed budget to the full Board of Trustees.

The increase, presented to the Finance Committee on June 12, would raise in-state maintenance and mandatory fees by 6% and apply a 6% increase to maintenance and mandatory fees for out-of-state categories except the out-of-state tuition premium, which the presenter said would be held. The committee's actions followed a presentation from Jim Grady of Alvarez and Marcel, who said the university currently faces about a $39 million budget deficit and that the institution must "take actions right now" to address it. "It's got a $39,000,000 budget deficit right now in the proposed budget," Grady said.

The finance presentation tied the proposed tuition increase to several elements of an overall deficit remediation plan that Grady summarized as a four-pronged approach: scholarship reductions, personnel cost reductions, operational (non-personnel) cost reductions and other revenue strategies. He told trustees that the university had already identified approximately $20'$25 million in deficit reduction measures and that personnel and non-personnel reductions each accounted for roughly $9'$10 million of that total so far.

Grady showed trustees projections the committee had shared earlier with state reviewers: a five-year funding request of about $95 million and a pro forma that had initially assumed a roughly $35 million deficit for FY2026. He said current budgeting work, including the proposed 6% tuition and fee increase, now shows a deficit in the proposed FY2026 budget slightly under $39 million. Grady said the difference between including and excluding the 6% increase is several million dollars and that not taking the increase would shift the burden elsewhere in the budget, potentially affecting classes and student services.

Trustees pressed presenters on enrollment assumptions and the effect of a proposed "purge" (a registration hold process) and other enrollment-control measures. Grady estimated the number of students potentially affected by the purge at "somewhere around a thousand" and warned that lower-than-expected enrollment would force deeper cuts. Grady and trustees discussed vacancy-driven personnel savings, including a plan to realize about $15 million of personnel cost reductions by leaving open identified noncritical positions and better position control.

After questions and debate the finance committee took three roll-call votes to forward recommendations to the full board: recommending the 6% tuition and mandatory fee increase, approving the FY2024'025 estimated budget, and approving the FY2025'026 proposed budget. Secretary roll calls recorded Trustees Norfleet, Traver and Winton voting "yes" on each measure and the chair announced each motion passed.

Why it matters: The trustee actions are intended to help the university narrow a multi-year budget gap as administrators implement a mix of revenue measures (including the tuition increase) and cost reductions. Trustees and presenters repeatedly linked near-term choices about scholarships, hiring and course scheduling to enrollment performance and to longer-term sustainability.

Trustees and administrators said follow-up will include closer monitoring of enrollment, additional deficit-reduction steps and continued scrutiny of vacant positions and contract/vendor savings. Several trustees urged continued work to quantify how proposed cuts and enrollment changes would affect student services and academic programs.

Ending note: The committee forwarded its recommendations to the full board; the full board is scheduled to act on the tuition and budgets at the university's board meeting following the committee actions.