Trustees and campus leaders weigh tuition scenarios as Minnesota State faces potential funding shortfall

Vice Chancellor Mackey told the Minnesota State Board of Trustees' Finance and Facilities Committee that the system faces a possible reduction in state support and significant uncertainty heading into the 2026–27 biennium, and presented tuition scenarios to help campuses plan for fiscal year 2026.

Mackey began by summarizing the February state budget forecast, which reduced the earlier surplus estimate and projected a larger deficit by 2028–29. He explained that Minnesota higher education makes up about 6% of the state's general fund and that the system's November budget request asked for $465 million over the biennium, including $285 million for student affordability and system operations. Mackey said the board is unlikely to receive that $285 million and noted higher-education targets from the governor and legislative chambers that would produce little or no new base funding for the system.

The vice chancellor outlined two specific reductions contained in current planning assumptions: a $22.5 million base reduction in operation support and a $12.5 million reduction in tuition replacement funding, together reducing system appropriations by $35 million. Using a set of inflation, compensation and enrollment assumptions, staff modeled multiple tuition-increase scenarios for fiscal 2026. Under a 3.5% tuition increase the system would still face a roughly $65 million structural gap for fiscal year 2026; a 5% scenario reduced the gap to about $54 million; 7% and 9% scenarios reduce the remaining gaps further but do not eliminate planning uncertainty. Mackey said the modeling treats tuition increases as system averages and noted individual institutions may propose different rates.

Presidents described local consultation and modeling. Winona State’s interim president said that, because of local budget shortfalls, his campus had proposed a 9.5% tuition increase and that the proposal passed through the campus student fee committee and student senate. Another president said their campus had modeled scenarios between roughly 3% and 9% and had cut operating budgets while reinvesting limited funds in enrollment and program growth.

Trustees and system leaders stressed the trade-offs involved: student affordability and equitable access versus institutional financial sustainability and the risk that large, early increases could prompt legislative reaction. One trustee and the board’s legislative adviser warned that dramatic tuition hikes in the first year after the board regains tuition-setting authority could provoke the legislature to limit that authority in later biennia.

Mackey reminded trustees that the board is scheduled to set tuition for the 2025–26 academic year at the June meeting and that tuition for fiscal year 2027 would be set at a later date, after additional information (including labor contract settlements and updated economic forecasts) is available. Trustees requested additional data for the next meeting, including sector-level net price and student-debt figures, tuition-discounting information, and more analysis of who actually pays tuition after grants and aid.

Discussion points, next steps and procedural notes: trustees asked staff to return with more granular analyses (discount rates, average student debt by sector, and net price/quintile analyses) and to present both system-average scenarios and institution-level impacts. Mackey said staff will provide supplemental materials ahead of May and June meetings so trustees can weigh tuition guidance while campuses continue consultations with student governments, bargaining units and campus stakeholders.