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ST. PAUL -- Some University of Minnesota students can expect tuition increases of up to 3.5% next year 鈥� the largest in a decade for in-state students 鈥� under a budget proposal presented Thursday to the Board of Regents.

Students on the Twin Cities and Rochester campuses would see the full 3.5% increase, while those attending Duluth, Morris or Crookston would pay half that.

The same rate of increase would be applied to undergraduate and graduate students, whether they live in Minnesota or not. Those in professional programs would pay 0 to 5% more than they do now, and the surcharge for business or science and engineering students would grow to $1,250 per semester, up from $1,000.

The university described the rate hikes in meeting materials as 鈥渨ell below the rate of inflation.鈥� Add the roughly 35% of students whose family incomes make them eligible for state and federal grants would have 鈥渁ll or a significant portion鈥� of the increase offset by increased government aid, budget director Julie Tonneson said.

Fee increases vary by campus. At the Twin Cities campus, room and board would rise by 4.8%and mandatory fees by 5%.

Tonneson said that in order to keep student cost increases below the rate of inflation, departments will have to cut back on positions, 鈥渇ind the deals鈥� when they buy, seek new revenue sources, spend down their reserves and keep pay raises in check.

The pool of money available for merit-based faculty and staff raises would grow by 3.85 percent next year under President Joan Gabel鈥檚 $4.2 billion budget. While below inflation, that figure is well above recent compensation increases at the university.

Regents discussed the budget Thursday but won鈥檛 vote until next month.

Darrin Rosha said tuition is too high, especially for the outstate universities that struggle to compete for students with universities in neighboring states. Included in the budget is $7.4 million in one-time funds to help those three balance their budgets.

鈥淭he Crookston, Duluth and Morris campuses were hit pretty hard this year with enrollment-driven tuition shortfalls,鈥� Tonneson said.

More generally, Rosha said, 鈥淚 just don鈥檛 think we should make this debt problem more difficult for a new range of students.鈥�

Board of Regents member Steve Sviggum said no one seems happy with the budget, which to him suggests that it鈥檚 a good one.

Between 2001 and 2011, annual tuition hikes at the Twin Cities campus ranged from 3.5 and 14.7% for in-state undergrads. In each of the nine years since then, increases have ranged from 0 to 2.5%.