Students are making up the difference for a decline in state and federal funding to the University, according to a report presented to the University Board of Regents on Friday.
Norman Herbert, associate vice president for business and finance, discussed the University's overall financial health. He said the University is in excellent fiscal condition.
"It is a very positive picture of financial operations at the University of Michigan," Herbert said.
Herbert reported that in the 1995-96 academic year, the University attained revenues in excess of $2.4 billion, through sources including tuition, private donations and government funding.
He also said state and federal appropriations are slipping in proportion to inflation rates, and that students are making up the difference.
"In (1986-87), 34 percent of the cost of education for students was paid by their fees," Herbert said. "In 1996, 57 percent was paid by students."
In the most recent academic year, student fees brought in more than $452 million to the University, while state appropriations brought in $335 million. When adjusted for the rate of inflation, the students' contribution to the University has risen by 10 percent in the last decade, while state funding has increased by 3.4 percent.
Regent Andrea Fischer Newman (R-Ann Arbor) said the regents are responsible for tuition and that the appropriations process in Lansing should not be blamed for rising student fees.
"You can't compare the University of 1987 to the University today," Newman said. "I don't need to see how much state money we saw in 1987."
She said attention should be focused on current fiscal realities. Newman, who was the only regent to vote against this year's tuition increase, said the University's values and needs have evolved over a decade.
Newman also said this year's budget could have been balanced without any tuition hike, and that a concerted effort is being made to slow the rate of tuition growth.
Herbert said the University has tried to mitigate the rising cost to students by offering more scholarship and aid programs. In the 1995-96 academic year, $135 million was spent on scholarships and fellowships.
Regent Nellie Varner (D-Detroit) said financial support is critical to keeping good students at the University. She said the public needs to be more aware of the importance of education.
"This is a public university and it is a premier public institution," Varner said. "It's one of the few public institutions of this quality in the entire world."
Varner said board members and administrators need to be "very vigilant in keeping state financial aid dollars."
Regent Philip Power (D-Ann Arbor) said the value of education is not as appreciated by legislators as it once was.
"There are other topics that the legislature deals with that are sexier politically than supporting higher education," Power said.
Power also said there has been "a very broad shift in public policy" that has prompted the state to tighten its financial belt.