UVa Board Trims Next-Year Tuition by 0.7%. Big Whoop.

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.

Davis made the argument — not an unreasonable one — that UVa is facing major financial pressures this year after two years of high inflation, the necessity of increasing salaries to offset the higher cost of living, and rebuilding financial reserves tapped to tide the university through the COVID crisis. At the top of mind was the need to reach the goal of reaching “top 20” status in the American Association of Universities of top-pay for faculty. UVa, which aspires to the No. 20 spot, is only 27.

She assured board members that UVa met the challenge in part by “continually cutting costs.” Savings through contract renegotiations, consolidation of units, optimizing physical space, outsourcing gift processing, optimizing transit schedules, building efficiencies and other measures amounted to $8 million, she said.

No one bothered to observe that the stated savings and efficiencies amounts to about .0034% of the operating budget — about one thirtieth of one percent. No one asked what other efficiencies might be in the works. And in light of a factoid mentioned by Murray — that two-thirds of the academic division’s cost structure consisted of payroll expenses — no one asked what the university head count was or how it compares to previous years.

That information appeared in none of the university’s presentation materials. Indeed, the presentation materials did not even compare next year’s budget with this year’s.

For the edification of readers, the academic-division budget approved by the board in 2022 was $2,095 million. Next year’s budget is $2,265.7 million. That’s an 8.1% increase.

The vast bulk of the budget work is undertaken by the university’s financial staff. By the standards of the higher-ed system, UVa’s financial team is top-drawer. Paying close attention to various risk vulnerabilities, UVa has assiduously maintained a AAA bond rating — a recent financial raise recorded the lowest interest rate ever charged an institution of higher education. However, it appears that the Board has largely relinquished the “power of the purse” to set university priorities.

The main board input into university finances occurs in the Finance Committee comprised of ten of the Board’s 17 voting members. The committee is chaired by Robert M. Blue (CEO of Dominion Energy) and vice-chaired by Murray, a veteran board member who, to my observation, has the keenest understanding of university finances of any currently serving board member. The minutes of the December and March meeting indicate that no substantive discussion of the 2023-24 budget occurred at that time. In other words, today’s action was the only crack the Board had at influencing the budget, and it responded with a resounding thump of the rubber stamp.

Two board members did offer pro forma observations about the need to restrain tuition increases and preserve affordability for the middle class. If board members want to help the middle class, though, they’re going to have to dig a lot deeper, ask much tougher questions, and reclaim authority from the university administration. For now, there is zero accountability.

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Wahoo74
Wahoo74
9 months ago

This is simply unacceptable. For the record, no one ever addresses out of state tuition. We are $20-30,000 more than UNC and UGA, 2 southern comparable competitors. UVA is now the same cost of attendance as Ivy League universities for non-VA students.

Out of state alumni historically donate more per capita and in absolute donor numbers than in state. That’s a fact. They are also making more than the ~ $125,000 max family income to qualify for Access UVA, but often not enough to pay the $80,000/yr. cost of attendance. You will see the costs for next year are estimated to be $80,414: https://sfs.virginia.edu/financial-aid-new-applicants/financial-aid-basics/estimated-undergraduate-cost-attendance-2023-2024.

UVA is not cost competitive and will lose its largest donor base. These same alumni are seeing many of their kids who are top performers get rejected so the Administration can meet its DEI driven student body quotas it continues to pretend it doesn’t impose.

These issues must be addressed by the BOV.

LRBlaszyk
LRBlaszyk
9 months ago
Reply to  Wahoo74

Couldn’t agree more. My son just graduated from a Catholic, college prep school in Atlanta. He ended up waitlisted at UVA for the Architecture program, and decided it wasn’t worth staying on that list with the $80K price tag. He is going to Auburn (which became his top choice once he learned of UVA’s price tag) where he will come out with a 5 year degree so he doesn’t have to apply for and pay for 2 years of grad school. As a proud UVA alum, I hate that it wasn’t even in the cards for him to go there from a financial standpoint…and my husband and I make good money…but I couldn’t begin to justify the cost if he had been accepted, nor saddle him with that amount of debt. One of his classmates did get into UVA off the waitlist but to your point, opted to attend UGA because she qualifies for the Zell Miller scholarship. UGA has built a solid academic reputation thanks in part to the Zell and HOPE scholarship programs. It is about as difficult to get in as UVA is for in-state students now. If our son hadn’t been deferred to summer of 2024 admittance to GA Tech, it would have been a serious contender. UVA has always considered itself a “public Ivy” and apparently wants to have the price tag to go along with it. However, they are cutting out a HUGE swath of smart kids who don’t qualify for any sort of federal or need based scholarship assistance, but whose parents also don’t want them to be saddled with crazy amounts of debt. I guess there are plenty willing to pay, though, so sadly I doubt anything will change.

MaryRuby
MaryRuby
9 months ago
Reply to  Wahoo74

Well said!

J Finger
J Finger
9 months ago

Jim,
Are there any metrics in terms of administrative expenses as a percent of the total budget, administrator / student ratios, or other efficiency ratios that the finance committee or board focused on? It is hard to get a large board (17) to make substantive changes to work already done (and approved) at committee level. If the committee can demonstrate the school is less efficient (more overstaffed) than some peers, then it can push back on management for changes and cuts. I assume a lot of efficiency info is public.

Wahoo 76
Wahoo 76
9 months ago

I agree. I watched part of this meeting, along with some of the UVA Wise presentation. It seems to me that the BOV meetings are primarily a venue in which staff are congratulated, not where hard questions are asked. If there are time constraints, the BOV needs to set aside other time for important matters. It is way past time for this to happen, and it also way past time for the four “new” BOV members to begin to assert themselves.

LEGACY GRAD
LEGACY GRAD
9 months ago

Data from UVA indicate that in the year 68’/69′ Tuition, Fees, & Housing were In-State: $777, and Out-of State: $1,362. An accepted CPI Factor of 4% per annum brought forward to today results as $6,717 In-State, and $11,774 Out of State. As personnel are the largest University expense, and Faculty/Student ratios have presumably changed little, there seems to be a huge quantity of non-teaching Administrators riding on the backs of students & parents. DEI slogans are spouted as students and parents are impoverished.

walter smith
walter smith
9 months ago
Reply to  LEGACY GRAD

And a big, huge part of that is course catalog inflation.
At least half of the courses are worthless. Teaching nothing, expensively.
Why not important, timeless knowledge?
Between Coursera and basic internet availability of everything, one truly motivated can acquire knowledge for nearly free. The “value proposition” does not exist for Underwater Basketweaving and Queer Studies… It borders on fraud
One thing I think would be an improvement would be for the college endowments to make the student loans, with the Admin responsible for bad debts. They might be a bit more choosy in who gets in and more concerned that they deliver value.

Wahoo 76
Wahoo 76
9 months ago
Reply to  walter smith

Yes!

lorna gladstone
lorna gladstone
9 months ago

As I keep writing…if they slashed the administration and reduced the deans by 30% and their own administrative minions tuitions would be very much reduced. No one needs a Dean of Diversity, a Dean of Women a Dean of Equity or a Dean of Nonsense.

lorna gladstone
lorna gladstone
9 months ago

UVa will price itself out of the market and more students will go to George Mason which is a much better institution anyway although with the prestige but that will change very soon.