e ic igan Daily
Vol. XCI, No. 43-S Ann Arbor, Michigan-Saturday, July 18, 1981 _ Ten Cents Twelve Pages
Tuition to increase 18%

Regents unanimously vote
to approve recommendation

PRESIDENT HAROLD SHAPIRO warned Regents this week of dire cir-
 cumstances for the University if the state appropriations are as disastrously
low as last year. In an effort to head off such fiscal crisis, the Regents raised
tuition yesterday, by 18 percent.
Questions arise over
hospital project's
size and fundinga.

By MARK GINDIN
Daily staff writer
As expected, the University Regents
voted unanimously yesterday to ap-
prove an 18 percent across-the-board
tuition increase for the 1981-82 school
year.
Resident freshmen and sophomores
will now pay $808 each term, while
juniors and seniors from Michigan will
be charged $910 per term to attend the
Ann Arbor campus. Tuition on the Flint
campus will also rise 18 percent, while
Dearborn tuition will climb by 22 per-
cent.
THE DECISION, stemming from the
recommendation of the University's
executive officers, includes the assum-
ption held by officials that the 12 per-
cent increase in state appropriation will
not materialize. The University faced a
shortfall had the increase not been ap-
proved, administrators warned.
Eighteen percent was the maximum
the officials could have taken before the
Regents, according to Vice-President
and Chief Financial Officer James
Brinkerhoff. In looking at the budget
for next year, the officers "could have
justified going higher," he said, but it
probably wouldn't have been approved.
Vice-president for Academic Affairs
Bill Frye said the University needs the
revenue from a tuition hike in order to
modestly raise faculty and staff
salaries this year. The tuition hike will
only mean the University "will fall less
short of the goal we should be aiming
for," he said.
REGENT DEANE Baker (R-Ann Ar-
bor) said he hoped approval of the 18
percent increase would prevent the
need for another rise later in the year.
"There has to be a commitment to
some constancy throughout the year,"
he said.
The state legislature appropriated 12
percent in increased support to the
University earlier this year, but Regent
Gerald Dunn (D-Lansing) said yester-
day he "would lay four to one odds"
that Gov. William Milliken would issue
an executive order reducing the ap-

propriation, probably in October.
Because of the delay, formation of a
budget for the coming year has been
postponed until September, said Frye.
Regent Thomas Roach (D-Saline)
said he hoped the University budget for
1981-82 would not be delayed past the
September goal. He stressed the need to
consider the tuition increase within the
context of a formal budget.
BAKER NOTED that the Regents
had approved a rise in several
miscellaneous fees for students in the
past year, such as an increase in Health
Service costs and Michigan Union
renovations. "I believe the tuition could
be two to three percent lower had those
proposals not been brought before the
Board (of Regents)," he said.
Later in the meeting, Baker ex-
pressed concern regarding spending for,
.more renovation projects after ap-
proval of a large tuition increase. "We
will end up with the world's greatest
university, but nobody will be able to
afford it," he said.
"If after we have a salary program
and tuition rate set, and we do generate
excess funds, I would like to see the
funds used to reduce tuition hikes in the
future," he said.
BEFORE THE vote, University
Financial Aid Director explained that
the Regents how financial aid reduc-
tions at the federal level would affect
students with the new tuition rate. He
said he hoped the'decrease, mainly at
the federal level, would not affect
students for the fall term.
"We do not anticipate major losses
for students in the 1981-82 school year,"
said Grotrian. "We are more concerned
about 1982-83." Most of the aid was
already set for the coming year, but the
cuts on the federal level will be felt next
year, he said.
"Many issues in the area of financial
aid remain cloudy at this point," said
University President Harold Shapiro.
However, student aid will be increased
by 18 percent to keep pace with the
tuition hike, he said.

By LOU FINTOR
Daily staff writer
The University Hospital
Replacement Project is once again the
subject of controversy as hospital of-
ficials begin revising a demonstration
of need application with the area health
systems agency, Comprehensive
Health Planning Commission of
Southeastern Michigan.
Several state and federal health care
planning officials have questioned the
timing of such a large state expenditure
in a time of "poor market conditions,"
particularly since many seem doubtful
that the University has proven suf-
ficiently that Southeastern Michigan
taxpayers are in need of such an exten-
sive research and teaching-oriented
hospital.
IF FUNDING plans materialize, the
project will become the state's largest
single construction project - sur-
passing the Mackinac Bridge - and ac-
cording to a former CHPC-SEM health
planner, "the most expensive hospital
per patient than any other non-profit in-
stitution."
"I'm surprised the legislature voted
that kind of money ($73 million) given
the economic situation of this state," a
government health planner said.
According to University Regent
Thomas Roach (D-Saline), student fees
will serve as collateral for University

Hospital revenue bonds, which along
with private donations, will cover the
remaining $110 million balance of the
$285 million complex.
ROACH MAINTAINS that the only
way the student fees would betaffected
was if "the hospital can't pay (back the
loan obligations)," adding that the
University has never in its history been
unable to pay back its financial
obligations.
But, Roach maintained that if the
University cannot meet payment
demands "we would get sued," adding,
"The lender would be allowed to grab
such assets as student fees, but what
happens if the United States of America
goes bankrupt, you just never expect
that."
Roach explained that the University
will be handling the initial cash flow of
the project since state bond sales will
not begin until 1983 through hospital
revenues.
Meanwhile, poor market conditions
have necessitated the postpont ent of
selling State Building AL iority
revenue bonds, which supply Ie fun-
ding for various state-assisted p )jects
including college construction gr its.
According to CHPC-SEM DirecLor of
Project Revision Donald Lamb, the
hospital replacement bonds "would be
See NEW, Page 5

Ann Arbor Campus
Tuition rates for 1981-82, per term
Resident/ Nonresident Tuition Increase
Undergrad-Lower Division $808/$2434 $126/$374
Undergrad-Upper Division $910/$2620 $142/$402
Graduate .............$1246/$2726 $192/$418