Source: State Council of Higher Education for Virginia (SCHEV)
by James A. Bacon
When Congress adjusts the tax code to promote income redistribution between the rich and poor, a debate plays out in the national media. When universities adjust their tuition to promote income distribution, by contrast, the process is so shrouded in secrecy that the public has no idea it’s occurring.
That process is less invisible in Virginia than it once was, thanks to a Youngkin administration initiative to post the most comprehensive higher-ed data analysis ever compiled on the State Council for Higher Education in Virginia (SCHEV) website. But the data will sit there — as good as invisible — until someone looks at it. And even publicizing the data is next to worthless if key decision makers — university administrations, activist groups, Boards of Visitors — don’t use it to inform their discussions.
The report, compiled over a six-month process with guidance from the Boston Consulting Group, explores three broad themes: enrollment trends, labor market trends, and financial effectiveness & sustainability. SCHEV looks at industry-wide trends for Virginia’s system of public education as well as detailed breakdowns by institution.
There is an immense amount of data to explore, some of which that will prove familiar to readers of Bacon’s Rebellion and some of it not. For this post I am focusing on tuition as a tool for wealth redistribution because that is data we have never seen before. Continue reading
The University of Virginia administration has asked the Board of Visitors to consider tuition increases in the range of 3.0% and 4.4% over each of the next two years, Chief Operating Officer J.J. Davis revealed in a Finance Committee public hearing this morning.
Davis cited inflation, declining state support, and the need to keep salaries competitive as justifications for the proposed increase. The full board will address the proposal in its regularly scheduled meeting next month. She also noted that tuition increases have moderated in recent years.
The hearing, required by state law, gave students the opportunity to provide input on tuition increases. Only one submitted a comment.
Nate Wells, a third-year, in-state student in the Batten School, told how his older brother enrolled at Ohio State University as an out-of-state student for less than it costs at UVa. “Around grounds we hear how UVa stacks up against peer institutions. … UVa is incredibly expensive, the third highest public university in the country.” He urged the Board of Visitors to keep the increase on hte low side of the range.
Earlier this month the Jefferson Council released its analysis of tuition and cost trends. Among the top-line findings: Only one-third of the tuition increase between 2002 and 2022 can be attributed to a cutback in state support. Higher spending — inflation-adjusted spending per pupil increased 50% over that time — accounted for the rest.
Davis alluded to an “efficiency and effectiveness” study underway, the results of which the university will share in the December board meeting. The administration has given no clue about the study’s focus, or whether it is tackling core cost issues such as mission creep, administrative bloat, or faculty productivity.
The Jefferson Council released the following press release this morning (Nov. 9, 2023):
CHARLOTTESVILLE—Rising costs, not cutbacks in state aid, are primarily responsible for pushing tuition higher at the University of Virginia. State appropriations for UVa have declined sharply between 2002 and 2022 when adjusted for inflation and enrollment. But tuition has exploded over the same time. Only one third of the increased tuition revenue was needed to offset state cuts. The other two-thirds represented spending increases, primarily in payroll.
Those are the major conclusions of a report, “Rising Costs: The Driving Force Behind Tuition Increases at UVa,” released today by The Jefferson Council, an organization dedicated to upholding free speech, viewpoint diversity, and Thomas Jefferson’s legacy at UVa.
The UVa Board of Visitors is working this fall on how much to increase tuition in the next two academic years. The Finance Committee has scheduled a public hearing November 17 in which students and other members of the public can address undergraduate tuition & fees. The Board is expected to approve a new tuition structure in December. Continue reading
by James A. Bacon
As the Board of Visitors ponders how much to raise tuition & fees in the next two academic years, the University of Virginia is grappling with strong inflationary pressures and a long-term shortfall in state aid, senior university administrators said Wednesday.
Even so, administrators told the Board’s Finance Committee, UVa offers a great “value proposition” compared to other Top 50 universities. Its in-state tuition is lower than that of top private universities, and its four-year graduation rate is the highest of any public university in the country.
The Finance Committee meeting yesterday marked the beginning of a two-month decision-making process. The purpose of the initial meeting, said Committee Chair Robert M. Blue, was to provide “context” for the discussion. A November hearing will allow students and others to express their views about college costs. The Board is scheduled to adopt a new tuition structure in December.
Although university officials did not say explicitly that a tuition increase is justified, the “context” presented was geared to supporting such a conclusion. Board members offered no pushback during the one-and-a-half-hour session, asking only a few questions for purposes of clarification. They did not drill into the data proffered by administrators, nor, despite assurances that UVa was working assiduously to achieve efficiencies and reduce redundancies, did they ask for specifics. No one addressed faculty productivity, administrative overhead, or other drivers of university costs. Continue reading
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
by James A. Bacon
A key cost driver at the University of Virginia is the increasing size and declining teaching productivity of its faculty. The topic appears to be taboo.
The Board of Visitors hasn’t discussed it, and there is no indication from publicly available sources that the university administration has engaged in any introspection. The slender evidence available to the UVa community is found on the website of UVa’s office of Institutional Research & Analytics (IR&A), a 17-person office deep within the bowels of the university. While that office does publish limited data online, it has not released any reports of an analytical nature.
Employee salaries, wages and benefits comprise roughly half of the university’s cost structure. While a 25.4% surge in salaried staff accounts for much of the growth in UV’s cost structure between fiscal 2012 and fiscal 2022 (see our article, “Hard Numbers on Administrative Bloat“), a 9.5% increase in “faculty” was a significant contributor as well. If we count teaching faculty only (tenure-track professors, lecturers and instructors) and exclude departmental-level administrators, whose numbers have been slashed, the “faculty” headcount bounded ahead by 25.7%.
By contrast, annualized FTE enrollment rose 8.8%. 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 C. Sherlock
Virginia’s state-funded colleges and universities are too expensive. Tuitions are the headline numbers. But student fees and food and housing costs are as important to the budgets of families and individual students as tuition.
Costs within the college system have gone up because of a general lack of management systems and data to support oversight. They are going up further because of inflation in the economy.
Demand is going to plummet starting in 2025 as the “demographic cliff” of a 15 % drop in freshman prospects approaches due to the decline in birth rate in the 2008 recession that lasted for years thereafter. The missing babies from 2008 would have begun entering college in 2025.
Not a rosy scenario for the colleges. They all talk about it a great deal internally. Some will have to get smaller to maintain student quality admissions standards or, alternately, lower those standards along with those of the programs of instruction. Continue reading
Signatures from the first meeting recorded in the Minute Book of the UVa board of visitors, May 5, 1817 – ALBERT AND SHIRLEY SMALL SPECIAL COLLECTIONS LIBRARY, UNIVERSITY OF VIRGINIA
by James C. Sherlock
Much has been made of a recent request by Governor Glenn Youngkin to eliminate a tuition increase at the University of Virginia and the Board’s decision not to honor it.
The tensions between means and ends that have to be resolved in producing a budget at any large and complex university are enormous.
UVa has implemented a Responsibility Center Management (RCM) budget model.
An RCM budget model decentralizes decision-making, provides incentives for innovation, and improves overall financial results and stewardship. It couples distributed program responsibility with meaningful authority over resources.
A central RCM budget product is thus fragile, in that changes have far reaching effects unpredictable at the board level. The later the changes, the bigger the disruptions.
The Governor’s request, while appropriate to his goal to help parents deal with inflation, arrived just before the start of the fiscal year. The board judged it to be too late to be accommodated. Continue reading
by James A. Bacon
The University of Virginia is freezing undergraduate tuition in the next school year, but increases in student fees, room, and board will total about $392, or about a 1.1% increase in the cost of attendance in the College of Arts & Sciences.
The board had considered boosting tuition as much as 3.1% this year, based on the national cost of providing a college education plus 1%, reports the Daily Progress. While the Board held steady on tuition this year, UVa President Jim Ryan warned, that the respite likely would last only one year. Continue reading