W&M Takes the Money and Runs

History of William & Mary cost of attendance (tuition, fees, room, board,

History of William & Mary cost of attendance (tuition, fees, room, board) for in-state students.

by James A. Bacon

The General Assembly boosted state funding for higher education by $300 million in the upcoming two-year budget in the hope that public universities would restrain tuition increases. Most universities have complied. Even the University of Virginia dialed back its planned tuition hike from 3% to 1.4%. But the College of William & Mary has decided to take the money and run. An extra $3.8 million from the state is not enough to induce the university to back off its plan to jack up tuition 12% for the incoming freshman class this fall.

W&M’s defense, according to the Richmond Times-Dispatch: Technically, the tuition does not constitute an increase, for it applies to incoming undergraduate students only, and the university has pledged to freeze their payments for their four-year attendance at the college.

Maybe so, but tuition just keeps climbing, along with the overall cost of attendance, as can be seen in the graph above taken from online W&M data. (You might notice that four years of data are missing. That’s because W&M switched formats for reporting the cost of attendance, omitting the cost of room and board for four years, making it impossible for anyone drawing information from the Web to make a continuous, apples-to-apples comparison of the total cost of attendance.)

If the total cost of in-state attendance had marched in lockstep with the Consumer Price Index, it would be about $9,400 today. Instead, the actual cost will be an eyelash shy of $36,000 — four times higher.

The perennial excuse for higher tuition and fees is cuts in state funding. There’s just enough truth there to be semi-plausible. State support for William & Mary has rebounded in recent years but it is still lower than back in 2001. Here are the numbers for state support:

2000-2001 school year — $50 million
2012-2013 — $40.6 million
2013-2014 — $42.4 million
2014-2015 — 42.5 million
2015-2016 — $43.7 million
2016-2017 — $47.3 million

Adjusting for inflation, the General Assembly has fallen $20 million behind over 16 years. But consider: there are 6,300 undergraduates enrolled at W&M. At $36,000 a pop, increased tuition, fees and revenues (before adjusting for student aid) should bring in $227 million, an increase of about $189 million. Cuts in state support for higher education account for about 10% of that increase. Clearly, there are far more important factors at work, and just as clearly, those costs are out of control.

Del. S. Chris Jones, R-Suffolk, chair of the House Appropriations Committee, is not happy. “I’m extremely disappointed,” he told the T-D. “This is mind-numbing ad potentially shows the (college) board of visitors are out of touch with reality.”

Said Vice Chair R. Steven Landes, R-Augusta: “”They’re really making it tough for middle-income individuals and families to afford William & Mary.” The board’s decision, he said, is “outrageous.”

Bacon’s bottom line: William & Mary perceives itself as a “public ivy.” Its administration, faculty and board of visitors are all driven by a desire to maximize the prestige of the institution, which means enrolling students with higher SAT scores, recruiting more prestigious faculty, building a bigger endowment, and doing all the other things that win accolades in the U.S. News & World-Report top college rankings — even while competing against other prestigious institutions who also want to climb in the rankings. Meanwhile, the university is buckling under higher regulatory costs, with the federal government playing a more intrusive role than ever before, and it needs more money to pay for financial aid for poor and working class students.

Of all the competing goals that W&M would like to achieve, affordability for the middle class gets the short stick… which happens to be a top goal of General Assembly politicians catering to middle-class constituents. Tension is built into the state-university relationship.

Deep down inside, William & Mary wants to privatize, jack tuition and fees to the level the market will bear, recycle money back to the poor, and increase its standing and prestige compared to peer institutions. While I vacillate on the topic, I usually tend to the view that we should let W&M be W&M. Let the institution go private, end state support, and re-direct the $47 million a year to other public institutions.

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10 responses to “W&M Takes the Money and Runs

  1. Sunday was 40 years to the day since my wife and I got our degrees from W&M. How could it have been such a great school then yet so affordable, compared to today?

    I expected this move. W&M is in the middle of its long range plan to boost its tuition to a private-school “market” price and I doubted the extra state funds would deter it. I bet UVA will be back on that same track by next year, if it waits that long. For one thing, both boards of visitors have long term plans they are executing but the legislature cannot make a similar long term commitment and assure the boards of steady revenue growth to compete with those plans. No legislature can bind a future legislature. History tells the boards that higher ed is way down the totem pole in a budget crunch.

    For another, as previously noted, they do it because they can. The owners of the schools, which would be us, do not demand that the General Assembly cap tuition. Instead we reward them with massive infusions of capital, usually ignored in these discussions. The schools have not run out of students able to pay these prices, and certainly won’t as long as their out-of-state enrollments can grow. And if the taxpayers do get disgusted and state operating subsidies disappear, they achieve the private status they crave. A game theorist would call that a sweet spot.

  2. These are just my quick thoughts. I think that the General Assembly has a right to be annoyed. William and Mary is a “Public Ivy,” as that term was used in a book from way back in the 1980s (I think), for what it is worth. And the administration invoked that status, repeatedly, to justify the William and Mary “Promise” (locked in rates for four years). The school is also in the middle of a billion dollar fundraising endeavor. But I question whether it is in good shape. The acceptance rate is going up, the yield rate is not good, and the school seems to have a hard time getting males to apply. In short, it has lost lots of ground to UVA. A quick look at the William and Mary website could leave one with the impression that it is a women’s college (maybe it was just the pictures I happened to see, though). That said, I think it would be a big mistake to go private. The thing that separates the school from the rest is its view of itself as the best small public Ivy in the country. Take away public and it becomes, what? The third best private school in the state? A watered down version of Wake Forest? In short, this huge tuition increase really bothers me. I wonder what is going on.

  3. Once upon a time, there was an explicit attempt to obtain freedom from GA governance control over these institutions up front, as the quid pro quo for the privatization gambit. But no longer. Why on Earth does W&M think the State is going to yield the power to appoint the Board without a struggle, even if operating the place doesn’t cost a dime in State funds; even if the State’s contributions to capital funding have been fully depreciated?

  4. Congrats Steve!

    I don’t think this is any big mystery.

    As long as kids flock to W&M as freshmen every fall – that’s the bottom line.

    Everything else including the state aid is gravy.

    W&M is a “brand” like Campbell Soup or Chevrolet. A diploma from W&M is worth 10 from Podunk U. Ditto UVA and a few others in Virginia.

    The same constituents who jump up and down about crony capitalism, government subsidies, and entitlements are pretty much fine with their elected in the GA showering money on their respective Alma maters. There is no Tea Party rebellion against funding higher ed even though they do rant about them being veritable cesspools of leftists … 😉

    so – we are essentially reduced to paying Higher Ed “bribes” to not increase their tuition rates “too much” but then W&M went rogue on them.

    I think as long as the classrooms fill every fall – they going to keep on truckin….

    and here’s another reason why:

  5. and this – 25 highest paid state employees in Virginia:

    higher ed is well represented…

    TOP 25
    1. Ronald D. Schmitz – Chief investment officer – Virginia Retirement System – Base salary: $382,500 – Total salary: $787,096

    2. Charles W. Grant – Managing director, internal assets – Virginia Retirement System – Base salary: $317,370 – Total salary: $671,181

    3. Paul Hewitt – Men’s basketball coach – George Mason University – Base salary: $666,348 – Total salary: $666,348

    4. Irving L. Kron – Professor – University of Virginia Health Systems – Base salary: $91,123 – Total salary: $561,100

    5. Nancy E. Dunlap – Vice president – University of Virginia School of Medicine – Base salary: $287,870 – Total salary: $550,000

    6. Angel Cabrera – President – George Mason University – Base salary: $151,273 – Total salary: $536,714

    7. John T. Grier – Director, internal equity management – Virginia Retirement System – Base salary: $258,145 – Total salary: $535,472

    8. Stephen R. McClelland – Program director – Virginia Retirement System – Base salary: $258,015 – Total salary: $535,342

    9. Steven P. Peterson – Managing director – Virginia Retirement System – Base salary: $268,100 – Total salary: $521,954

    10. Robert F. Bruner – Dean of Darden School of Business – University of Virginia – Base salary: $518,900 – Total salary: $518,900

    11. Kenneth C. Howell – Managing director, global investments – Virginia Retirement System – Base salary: $271,127 – Total salary: $515,266

    12. Charles W. Steger – President – Virginia Tech – Base salary: $190,567 – Total salary: $508,572

    13. Robert H. Cofield – Associate vice president for hospital and clinics operations – University of Virginia – Base salary: $505,393 – Total salary: $505,393

    14. Michael S. Rao – President – Virginia Commonwealth University – Base salary: $181,387 – Total salary: $503,155

    15. Paul G. Mahoney – Dean – University of Virginia School of Law – Base salary: $495,000 – Total salary: $495,000

    16. Teresa A. Sullivan – President – University of Virginia – Base salary: $179,626 – Total salary: $494,700

    17. Thomas P. Loughran – Director – University of Virginia Cancer Center – Base salary: $473,400 – Total salary: $473,400

    18. Bryan R. Gardiner – Director, fixed income management – Virginia Retirement System – Base salary: $225,570 – Total salary: $467,681

    19. Michale J. Friedlander – Executive Director, Carilion Research Institute – Virginia Tech – Base salary: $465,000 – Total salary: $465,000

    20. Patrick D. Hogan – Executive vice president and chief operating officer – University of Virginia – Base salary: $302,940 – Total salary: $459,000

    21. Field H. Griffith – Director, real estate investments – Virginia Retirement System – Base salary: $257,560 – Total salary: $458,791

    22. Stephen T. Fairchild – Assistant football coach – University of Virginia – Base salary: $450,000 – Total salary: $450,000

    22. (tie) Jonathan G. Tenuta – Assistant football coach – University of Virginia – Base salary: $450,000 – Total salary: $450,000

    22. (tie) Thomas P. O’Brien – Assistant football coach – University of Virginia – Base salary: $450,000 – Total salary: $450,000

    22. (tie) Shaka D. Smart – Men’s basketball coach – Virginia Commonwealth University – Base salary: $450,000 – Total salary: $450,000

    • Your graphic indicates the highest paid state employee in Virginia is a football coach, Larry, but your list indicates its the VRS chief investor. So, something is amiss in your sources. In fact, there are no head football coaches on the list at all, just some assistants.

      • well two different sources… agreed! but how can ASSISTANT Coaches get 400K a year as state employees?

        how does that work?

        VRS was well represented also.. yes….and I guess we might consider the VRS guys getting the equivalent of finders fees for their efforts to do good investment work for Virginia on their pension fund obligations, eh?

        but back to Universities.. and the how and why we Virginians are willing to subsidize them to then turn around and rip off Virginian’s kids for tuition anyhow and of course those kids and parents willing to sign up for horrendous loans to pay for outrageous tuition from subsidized Universities all the while railing and ranting about big bad government!

        and the answer is – that Virginians and their kids are total suckers for big name brand Universities with big sports programs – even when there are tons of lesser known high quality higher ed institutions with few or no sports programs.

        yet – they rail and rant in their blame of others… and govt.. when the simple truth is they choose to be willing participants in the whole scam.

        sort of like they deserve each other…

        big time college sports has perverted the entire concept of Higher Ed but you gotta admit – it’s what folks want – apparently any any price.

  6. Something’s that rarely mentioned in the “privatization” conversation about William and Mary and U.Va. is that Darden and U.Va. Law “privatized” in all but name a decade or so ago. I believe both schools are completely self-sufficient and only give a nominal discount to Virginia residents. The state didn’t fall apart when those two schools privatized.

    Why not use that as a compromise? W&M and U.Va. take the Darden route: no state funding, no in-state preferences in admissions, financial autonomy, and a small discount on tuition to Virginians that are admitted. Thus, they no longer get state funding, but they’re not completely “private” either in the sense that they offer a discount to state residents who attend.

  7. I agree with Cville Resident – let these schools actually work as in the private sector – with their tuition set to whatever it takes to fund the University and let consumers decide what schools offer them the value and affordability they seek.

    If Virginia wants to actually help Virginia kids – give Va kids scholarships directly – not through the schools.

    And I’d key to scholarships themselves on what course of study the student is going to pursue with higher value scholarships for fields for which there is demand in the economy.

    I find it just odd that the libertarian, free-market, often anti-govt free market folks bitterly complain about what really is a predatory rip-off scandal among the Universities – perversely subsidized by the State – have little to say other than whining that the State should “force” them to behave.

    between State-level higher Ed subsidies and Fed govt loans – we have created bloated bureaucracies who actually are functioning in predatory ways similar to for-profit , fly-by-night “Colleges”

    The State should wash their hands of subsidies for Colleges and Universities and direct Higher-Ed money to students directly -with strings – and then a real market will incubate. Students, with portable scholarship in hand – then become consumers making decisions based on value and affordability.

    If we are going to give money – we’re giving it to the wrong folks. It should be going to students not institutions because all we are doing is rewarding those institutions for actually victimizing those trying to get a college education.

    On a related theme – I saw an article the other day that said that College graduates who have gotten good paying jobs – pay off their student loans much quicker – and that some employers – who need highly educated grads actually are providing perks to pay off student loans.

    We could do that with Medical jobs in RoVa… and teaching positions in lower-income neighborhood schools.

  8. The facts, math, and issues are being greatly distorted here. Was it reasonable for the House of Delegates to expect William and Mary to adhere to the 3% limit for tuition increase? If you understand the William and Mary Promise program, the answer is clearly no.

    The William and Mary Promise was implemented 3 years ago (long before this year’s budget and guidance). Part of the Promise is a guarantee that tuition will not rise during an undergraduate’s four years at the school. The implication of this is William and Mary is only setting tuition for about 25% of the undergraduate population each year, while the other schools are raising it for 100% of the undergraduate population. If William and Mary adhered to the 3% guidance, it would raise overall tuition revenue by only .75% (3% tuition increase x 25% of the undergraduate population) vs 3% for other institutions (3% tuition increase x 100% of the population).

    Looking at it the other way around, William and Mary would not be able to raise tuition for the next three year. All other institutions are not bound by this and would likely increase tuition for each of the next three years. Nationally, tuition has increased 5% per year over the last 10 years according to the College Board. In Virginia, over the same period, it was 6.7% per year according to the State Council of Higher Education for Virginia.

    Assuming the cost per year before the first increase equals 100, the cost for 4 years at William and Mary with a 3% increase only for year 1 would be 412 (103 x 4). For another Virginia institution with a 3% increase in the first year and the national average of 5% per year for the next three, the total would be 444 or 8% higher. If we used the Virginia average of 6.7% per year, the total would be 455, or 11% higher. William and Mary would be losing out versus other Virginia schools with a 3% increase and the Promise. The math is clear.

    Since the William and Mary Promise program is established and public knowledge, what were the House of Delegates critics really expecting? That William and Mary would keep the Promise, adhere to the 3% target, and give up revenue vs the other Virginia schools that are not bound to the Promise? That William and Mary would adhere to the 3% target, but revoke its standing Promise commitment to students in order to get the same revenue treatment as other Virginia schools? Neither one of those is reasonable.

    Mr. Bacon’s opening graphic may give the impression that William and Mary’s cost increase is unique. It is not. UVA’s tuition and fees were $484 in 1970-71. In 2014-15, they were $12,998. That is a compound growth rate of 8% for 44 years. This is typical and exceeds inflation cost of living significantly.

    William and Mary is being made a scapegoat here for having a different tuition model. There is a huge problem with exploding costs in higher education, but the Promise model isn’t the problem.

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