Higher Ed Bubble? What Higher Ed Bubble?

… I don’t see no stinkin’ higher ed bubble.

So much for new fireworks between University of Virginia President Teresa Sullivan and the Board of Visitors. It appears that the administration and board have come to an agreement on how much to raise tuition next year.

The good news: The administration has abandoned its proposal to jack up the tuition for third- and fourth-year students on top of regular tuition increases. The bad news: The University will hike fees for everyone more aggressively.

Under the original proposal, administrators had called for increases of 2.9% and 3.9% respectively for in-state and out-of-state students, plus an add-on fee for upperclassmen. Instead, the board settled for increases of 3.8% and 4.8% for in- and out-of-staters. After inflation, that’s an increase of 2% to 3% per year during a time when real wages for most Virginians are stagnant.

In its reporting, the Daily Progress provides no explanation for the decision, although it does quote board member William H. Goodwin as previously having said that the original proposal might constitute “double-talking” — hiding a tuition increase as a fee.

Score a small victory for transparency. Score another loss for affordability. UVa continues unabated its march toward higher prestige rankings by beefing the incredibly expensive scientific and technical disciplines and chasing R&D dollars.

In related news…. Virginia Commonwealth University’s administration has proposed an overall 4% increase in tuition that would be coupled with a shift to a charge per credit hour rather than per semester, reports the Times-Dispatch. The idea is to discourage students from signing up for the maximum 18 credit hours — blocking others from enrolling in a needed course — and then dropping out.

Given the current economic circumstances, the 4% increase amounts to predatory pricing. But, I must concede, the shift to charging by the credit-hour does make sense.

So continues academia’s plundering of middle America…


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8 responses to “Higher Ed Bubble? What Higher Ed Bubble?”

  1. well.. let’s see.

    they selling something that people want – a “brand name” school… with a significant sports program – subsidized usually.

    and.. the government is willing to give them fire-sale loans as well as tax credits.

    are there schools in the US that will “sell” you a high-quality education for a lot less money?

    you bet your bippy bro.

    are people flocking to those schools to get a cost-effective high quality education? NOPE! (well, a FEW are…..).

  2. DJRippert Avatar

    Not sure I agree with this statement:

    “UVa continues unabated its march toward higher prestige rankings by beefing the incredibly expensive scientific and technical disciplines and chasing R&D dollars.”.

    UVa has been falling in the rankings while raising prices. It has fallen in the USN&WR rankings from #15 to #25 over the past 25 years. 10 spots is a long fall over 25 years.

    Meanwhile, other public universities have done just fine (UC – Berkeley and UCLA come to mind).

    My opinion is that the “Casteen era” was a disaster and Sullivan shows no signs of reversing the decline.


    1. reed fawell III Avatar
      reed fawell III

      UVA was ranked #11 Nationally in early 1960s. I recall tuition was $350 or so plus books, room, and board, per semester.

      “”Casteen era” was a disaster.” I concur.

      1. DJRippert Avatar

        I am not sure how raising tuitions a couple of percentage points above inflation fixes the decline. They have a $5B endowment for goodness sake. The highest per-capita endowment for any public university.

        “What is the difference between restricted/unrestricted funding provided by the endowment? How much of the endowment income is available to spend in a given year?

        Donors may designate, or restrict, the use of the income from their gift for a specific purpose, such as a professorship or a scholarship. These restrictions are established through legal contracts donors sign with the University and are enforceable through trust law. Donors also may opt not to restrict their gifts to the University. In the case of such unrestricted gifts, income from these funds is available to spend on needs as they arise. Increasingly, gifts to the University (and to other institutions of higher education) are restricted by donors who want to determine exactly how their gifts are used.

        The endowment distribution in the fiscal year 2011-12 totaled $134.9 million. The estimated distribution for fiscal year 2012-13 is about $138.9 million. About 32% is not donor-restricted, but the unrestricted endowment income is currently committed to Board of Visitors’ priorities such as AccessUVa, the Commission on the Future of the University initiatives, enhancing faculty salaries, improving the residential experience of students, and graduate fellowships. Additionally, the unrestricted endowment income is used to fund investments such as fundraising.”.


        1. Fine, I’ll amend my quote to say, ““UVa continues unabated its QUEST for higher prestige rankings by beefing the incredibly expensive scientific and technical disciplines and chasing R&D dollars.”

      2. reed fawell III Avatar
        reed fawell III

        I recall that, back in the 60’s, the percentage of out of state students at UVA was substantially higher than it is today. I have no sense of the pace of that perfectly understandable increasing share of Virginia students admitted, but perhaps todays test scores from the group play into UVA’s ranking versus other schools who are not so constrained.

        If so, then UVA is at some point fighting an uphill battle it can’t win. Indeed then, to an extent, raising tuition might by counter productive.

        Apparently UVA believes that the drop in its ranking relates in material degree on faculty salary. Thus attack the issue there, knowing that lowering the Va. student share of student body will not fly politically.

  3. DJRippert Avatar

    Download the endowment annual report from 2012:

    Looks like the endowment is generating over twice as much in returns as is distributed (for FY2012 at least).

    I guess having an ever growing endowment is more important than educating Virginia’s middle class kids.

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