by James A. Bacon
The University of Virginia Board of Visitors sets tuition & fees every other year. This is one of those years. In December the Board is scheduled to announce tuition and fees for the following two academic years. The decision-making process is sure to be controversial, as a number of Youngkin appointees on the board are fiscal hawks who hope to keep costs down and tuition hikes low.
The Ryan administration fired an opening salvo by distributing the graph above, which shows UVa in a highly flattering light. If you are a Virginia resident and wish to attend one of the Top 50 universities in the country (as rated by USNWR, or U.S. News & World Report), UVa charges the lowest tuition and fees. The graph is hard to read, but UVa is represented by the bold orange line at the far right, so you can see that it is the lowest by a wide margin.
Presentation of the graph prompted the most animated discussion by Board members so far in the September meeting. Continue reading
The University of Virginia’s AAA bond rating was confirmed by the S&P bond rating agency recently, and verbally confirmed by Fitch. UVa is one of only four public universities in the country with the highest possible assessment of financial strength. What’s that rating worth to the university?
Board member and former finance chair Jim Murray had an answer for the Board of Visitors Thursday — $33 million. If all of UVa’s debt was rated two notches lower at a single A, as is the case with 63 public universities whose bonds S&P has examined, the difference in interest payments would be $33 million a year.
Through many years of turnover through Republican and Democratic administrations, protecting the AAA rating is one priority that every Board has shared. — JAB
by James A. Bacon
Responding to a Youngkin administration request for Virginia’s public colleges and universities to curb tuition increases, the University of Virginia Board of Visitors voted this morning to reduce a scheduled 3.7% tuition hike next year to 3.0%.
As explained by Chief Operating Officer J.J. Davis, the shaving of $5.5 million from the budget represents a “good faith” effort to comply with the administration’s request. But in response to a question, she acknowledged that it only “partially” complied.
“This is very late in the budgetary cycle,” which closes June 30, said former Rector and the board’s financial guru James Murray. “We’re supposed to have a budget number in March. It’s very difficult in this point the year to say, ‘Go find millions of dollars.'” He described the partial rollback as “a concession to political reality.”
In other business, the Board also approved a $5.4 billion operating budget for Fiscal 2023-24, which begins July 1. The budget encompasses the academic divisions of the University of Virginia main campus, the campus in Wise, and the UVa Health System. The UVa main-campus operating budget amounts to $2.3 billion.
To an outside observer, the proceedings were remarkable — for the lack of oversight. Board input into what is arguably the most important vote of the year was inconsequential. Aside from praise for the UVa financial staff and a few requests for clarifications, board members had little to say. They offered no substantive questions. They provided zero pushback. Continue reading
by James A. Bacon
In explaining the cause of rising tuition & fees at the University of Virginia, we described last week how the driving force over the past 20 years has been a relentless increase in spending. Expenditures in the academic division of the University of Virginia, fueled by an expansion in salaries, increased 135% between 2002 and 2022, far outpacing the 59% rise in the Consumer Price Index and 20% increase in enrollment.
But that’s not the whole story. While expenditures were surging, state support for UVa and other public universities in the Old Dominion lagged far behind. Colleges and universities, the higher-ed lobby has argued, have had little choice but to offset public parsimony by raising tuition & fees.
A Jefferson Council analysis suggests that there is some truth to this assertion at UVa but it falls woefully short in explaining the ascent of tuition & fees to stratospheric levels. After adjusting for inflation and enrollment growth, roughly 30% of the tuition hikes have offset the decline in state funding while 70% went toward higher spending.
While coping with stagnant state funding, UVa presidents and Boards of Visitors looked to increased gifts and higher tuition to pay for their aggressive spending increases. Gifts have surged over the 20-year period and now equal state support as a source of funding at UVa. But the bulk of new revenue has come from tuition hikes. Continue reading
by James A. Bacon
Tis the season for Virginia’s universities to announce how much they are raising tuition & fees for the upcoming academic year. Virginia Tech’s Board of Visitors has jacked up tuition by 4.9% and the College of William & Mary by 4.5%. Virginia Commonwealth University is considering an increase of 4% to 5%, George Mason University 3%. After a bout of inflation that peaked around 9% and is still running about 6%, putting both university and family budgets under stress, the pressure on governing boards is intense.
At the University of Virginia a tuition increase has been baked into the cake since November 2021 when the Board of Visitors approved a two-year increase of 4.7% in 2022-23 and 3.7% in 2023-24. Under pressure from Governor Glenn Youngkin to hold down charges, UVa issued a rebate to in-state undergraduate students to offset last year’s increase. But there has been no indication that the Board will reconsider a refund in 2023-24. In-state undergrads could well find themselves paying 8.4% more next year.
UVa officials, like their peers at the state’s other public universities, blame the failure of state support for higher education to keep pace with growing enrollment and the escalating Consumer Price Index. In the past, UVa’s board has rarely questioned that claim. But now some board members want to dig deeper into the numbers. Continue reading
Editor’s note: This is the first in an ongoing series of articles based on material presented to the University of Virginia Board of Visitors — material that never sees the light of day in standard news sources. We aim to provide a more complete understanding of how the university is governed.
Auditors found a “material weakness” in the University of Virginia’s Fiscal 2022 financial statements but said they had uncovered no indication of fraudulent or illegal activity.
“We have resolved any significant difficulties experienced,” David Rasnic, head of the Auditor of Public Accounts’ higher-ed auditing team, told the Board of Visitors Wednesday.
The audit revealed two sources of concern that increased the risk that might give rise to financial misstatements. First, there was no central authority to align the financial reporting of UVa’s academic division and its healthcare division. Creating a central authority, said Rasnic, “would be helpful.” Continue reading