Rutgers University has approved a tuition increase for the upcoming school year.

The university's Board of Governors voted Wednesday to raise tuition and fees by 2.3 percent, or about $337.

This increase means the average in-state undergraduate student at its New Brunswick campus will pay about $27,681 for the upcoming school year. Students will also pay more for housing.

Tuition rose 1.85 percent last year, 1.7 percent in 2016 and about 2 percent in 2015 and 2014.

Kathy Dettloff, the university's vice president of financial planning and budgeting, says financial aid will offset the increase for the majority of students.

University President Robert Barchi says Rutgers is facing "significant financial challenges" and must make "difficult choices" to keep tuition increases low.

New Jersey ranks eighth in the nation for having the highest college tuition rates, according to a study by Forbes. The study was based on the cost of living rates. New Jersey students may pay as much as $2,700 more than others across the country.

Kean University is also increasing its tuition and fees just under 2 percent next year. In-state students will pay $12,300 per year for tuition. Out-of-state students will pay over $20,000.

Tuition and fees at The College of New Jersey is about $16,000 per year for in-state students. Out-of-state students pay $28,000 per year.

The Associated Press wire services contributed to this report.