How UVa Offsets Bureaucratic Bloat

by James A. Bacon

College Simply‘s 2023 Best Value Colleges in America ranks the University of Virginia as the 2nd “best value” among public colleges and universities in the United States in 2023. The best-value distinction is conferred upon institutions that provide students the most academic prowess for the money (defined as net tuition after financial aid to the student).

When critics of UVa governance accuse the university of supporting excess administrative overhead, a common response is: if UVa is so bad, how come it’s the second-best value among all public institutions?

That’s a fair retort and well worth exploring. In this column, I suggest that UVa has restrained the highly visible and politically sensitive metric of undergraduate in-state tuition not through budgetary belt-tightening but by pursuing two strategies: (1) maintaining a favorable ratio of students who pay the full freight versus those who require financial assistance; and (2) increasing enrollment for out-of-state post-graduate students who pay higher tuition than in-state students. Much if not all of UVa’s perceived superior value comes from tuition-and-admissions engineering.

UVa’s tuition revenue rose 276% between 2002 and 2022, far exceeding inflation (59%) and enrollment growth (20%). How was that achieved?

The first table below compares the percentage of lower-income students at UVa versus the percentage at all Virginia four-year colleges and universities. The percentage of lower-income students at UVa is 12.2 points lower — equivalent to one-eighth of the student body — than the state average. Compared to institutions serving lower-income populations such as Norfolk State University, the lower-income gap is 37 percentage points.

The practical consequence is that the percentage of students paying the full tuition at UVa is much higher than the state average — 36% paying $15,000 or more compared to only 20% for Virginia’s public four-year institutions as a whole (and 5% at Norfolk State). Thus, UVa admissions strategy yields more revenue per student on average than for most other institutions.

UVa’s other strategy is to increase the percentage enrollment of out-of-state students in medical school and many graduate-level programs, which charge out-of-staters significantly higher tuition.

Increasing tuition & fees for in-state undergraduate students leads to outcries among parents and prospective parents, who raise hell with their state lawmakers who, in turn, create legislative mischief for UVa. By contrast, out-of-state parents upset by high tuition have no political voice. The only thing holding back tuition increases for them is competition from other elite institutions… all of which have been ratcheting rates higher as well.

At the same time, reducing the percentage of in-state undergraduate students is politically perilous. Lawmakers would hear about it if UVa cut the number of undergraduate in-state students, depriving constituents of the opportunity to send their offspring to Virginia’s flagship university. With small year-to-year fluctuations, UVa has consistently maintained the fraction of in-state undergraduate students at around two-thirds.

The ratio of in-state to out-of-state undergraduate students at UVa has stayed within a range of 2.7-to-1 to 3.2-to-1 between 2002 and 2022.

Conversely, political blowback from tinkering with in-state/out-of-state ratios for graduate and professional schools has been non-existent. Not surprisingly, UVa has seen a marked decline in the percentage of in-state graduate students and a corresponding increase in out-of-state graduate students.

In 2002 in-state graduate students at UVa roughly equaled the number of out-of-state graduate students. Around the 2006-07 academic year the ratio began shifting in favor of out-of-state students. Today, the ratio stands at one in-state graduate student for every two out-of-staters.

An identical trend can be seen among “first professional” students, a category encompassing those who pursue law, business, and a variety of medical degrees.

Among first professionals the shift has been even more pronounced. In 2002 the in-state/out-of-state ratio stood at 1.2-to-1. Today, it is 0.5-to-1.

The financial logic behind this shift is evident when comparing the tuition charged to in-state versus out-of-state students. The following tuition charges are extracted from the tuition summary presented in December 2022 to the Board of Visitors.

UVa’s Darden School of Business and School of Law are highly autonomous operations, nationally regarded as the most prestigious schools within the university, and they cater to a national market. They give little preference to in-state Virginia students and charge nearly the same stratospheric tuition. But all other schools and colleges charge out-of-state students significant premiums — generally in the range of $12,000 to $14,000.

To see what a difference this makes, let us assume a $12,000 premium for out-of-state graduate students typical of 2022. If UVa had maintained the in-state/out-of-state ratio that prevailed in 2002, it would have generated $171.5 million in tuition revenue. By contrast, increasing enrollment of out-of-state students to 2022 levels would have generated $222.4 million in tuition revenue — about $50 million more. Similar differences would have been found for medical school first-professional students.

For context, tuition revenue from all sources in 2022 totaled $669 million.

Bottom line: one can acknowledge that UVa is a “best value” university for in-state undergraduate students without crediting the University with taming administrative bloat. The good news here is that there is vast room for improvement should President Ryan and the Board of Visitors get serious about working off that unsightly bureaucratic bulge.


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18 responses to “How UVa Offsets Bureaucratic Bloat”

  1. Eric the half a troll Avatar
    Eric the half a troll

    Some people just refuse to acknowledge how great our commonwealth and it education system really is… alas…

    1. DJRippert Avatar
      DJRippert

      Beluga caviar is great too. Pity so few can afford it.

  2. And just like VT — lots of ChiComm students… lots of them.

    1. VaPragamtist Avatar
      VaPragamtist

      I recently learned that VT has a FT employee to provide support to the student government. You can argue the pros and cons of the 55k per year position.

      But they’re now hiring a project coordinator under that individual as well at 42-45k.

      Additionally, they have a graduate assistant (something like a 20k stipend + 35k tuition)

      And an undergraduate student wage staffer (assume 5k).

      Adding in benefits for the 2 FT employees, that’s about $200,000 each year for “support” for one student organization that almost no one at VT knows or cares about, except the 80 or so students involved in it.

  3. Lefty665 Avatar
    Lefty665

    “2nd “best value” among public colleges and universities in the United States in 2023.”

    Maybe that says more about the sorry state of public colleges and universities than it does about UVa.

    But, your illustration of how the student population and fees are structured is illuminating. Bureaucracy protecting and fattening itself and clearly not for the benefit of less affluent Virginians.

    Is it ironic or hypocritical that with the huge DIE staff UVa has amassed it serves a far smaller percentage of lower income students than the average of Virginia colleges and universities? That is not very inclusive, financially diverse or equitable.

    Perhaps if UVa instead invested the $10M+ it spends on DIE staff each year on subsidizing costs for low income undergraduates it could bring itself up to state averages of financial inclusivity.

    The JC might raise some eyebrows by excoriating UVa for failing at DIE.

  4. Lefty665 Avatar
    Lefty665

    https://www.washingtonexaminer.com/restoring-america/faith-freedom-self-reliance/brutal-new-research-shows-how-the-government-ruined-higher-education

    https://lesleyjturner.com/GradPLUS_Feb2023.pdf

    Here’s an analysis that it was the Federal expansion of full loans that has driven the explosion of tuition prices and by extension administrative bloat without changing the composition of the student body.

  5. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    In all these discussions, the emphasis is on the “bureaucratic bulge.” I agree that higher education is top heavy. I have long wondered what all those assistant and associate deans actually do. Cutting down on administrative costs is an easy target and can play well politically. However, how much do you think you can really save in this endeavor? Do the math. Come up with a reasonable assumption and calculate how much that level of savings could reduce tuition. My guess is: not very much.

    Tuition usually gets the spotlight. However, the real cost increases have come in mandatory fees and room/board. For example, the Times Dispatch reports today that VCU will increase tuition by 3 percent next year, adding $591 to a student’s bill. However, it is also increasing room and board by nine percent, adding $1,093. (I am assuming that nine percent increase covers more than room and board and that other fees are included.) The result: tuition will cost $16,000 annually and room and board (and other fees), $14,000. In summary, room and board and fees make up almost half of the cost. I don’t have the figures, but I can guarantee that room and board did not constitute that high a proportion of the cost of college when I was a student. If you are looking for real savings, concentrate on the non-tuition costs.

    1. VaPragamtist Avatar
      VaPragamtist

      Room and board are a little tricky. While VCU may charge that amount to cover increased cost in supplies, food service wages, dorm renovations, etc., the “room and board” cost also factors into the Total Cost of Attendance for financial aid purposes. So a student living off campus can still obtain funding for those living expenses.

      I do find it interesting that for some students, board can be required, but not mandatory. For example, Virginia Tech increased the meal plan rate mid year last year without a public hearing, and without any notice to anyone outside of the administration and BoV. Any student who lives on campus must purchase a meal plan–it’s required. Any increase to mandatory fees must first have a public hearing. But while board is required for some, it’s not mandatory.

      Also at VT, the top 100 paid employees all make over $250k. I don’t feel like digging up data, so let’s assume the average is $300,000 for easy math. A 1% increase in tuition is equal to about $5 million in new revenue. These employees are all overpaid compared to their peers in other state agencies. A 25% reduction in these bloated salaries (those making 250 will only make 187,500. . .still more than the governor. . .the CFO at 333k will drop to a pauper’s 250k), will result in an 7.5 million in savings, or about the same as 1.5% in tuition. And that’s just the top 100 paid employees out of a university with 2,500 faculty and god-knows-how-many AP faculty and staff.

      It adds up.

      Then there’s the other side of it: how much are these universities making? What is the unrestricted net revenue year after year? How much is that increasing? Do these universities still have multi-billion dollar “slush funds”? Is it really necessary to continue to go to students and taxpayers with your hands out if you’re continually generating revenue and squirreling it away?

      1. Dick Hall-Sizemore Avatar
        Dick Hall-Sizemore

        In principle, I agree with you. The reality is, however, that you are not going to be able to effect a 25 percent reduction in those administrative salaries. In the first place, they probably have contracts setting out their salaries. Also, to make such an approach feasible, it would have to be done at all higher ed facilities and the salaries for those positions would have to be standardized across the system. That’s not happening in Virginia.

    2. I totally agree — room and board are big drivers in the total cost of education. Universities believe they have to offer better amenities to be competitive, so they build nicer dormitories and offer much nicer food plans. No question, the quality of the hotel/restaurant services are superior to what we enjoyed when we were students. Trouble is, while some students’ families can afford it, some students’ families can’t.

    3. WayneS Avatar

      But if it saves even one dollar in tuition it will be worth it…

  6. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    As I have advocated in the past, the best way to rein in higher ed spending is:
    1. Freeze tuition and fees
    2. Provide state funding for salary increases at specified level

    Such an approach would force higher ed institutions to find ways to cut spending whether it be reducing administrative overhead, eliminating fringe academic programs, etc.

  7. walter smith Avatar
    walter smith

    Very much on point.
    I attended my daughter’s sorority event earlier in the year. Many of the “sisters” were out of State and you could tell the parents were very affluent. Many of the girls drove cars nicer than I have ever bought (but I’m cheap, not THAT hard to do)..
    But the extraneous bloat is real, besides the poisonous DEI. Building a hotel at corner of 250/29. Darden has a hotel.
    Then let’s go into all the worthless departments. If you go into debt to get these degrees, you are an idiot.
    Here are a couple of “worthwhile” events offered by UVA x
    https://www.virginia.edu/calendar?trumbaEmbed=view%3Devent%26eventid%3D166804920
    I particularly like this one…

    https://www.virginia.edu/calendar?trumbaEmbed=view%3Devent%26eventid%3D165166215

    What a joke.

  8. f/k/a_tmtfairfax Avatar
    f/k/a_tmtfairfax

    How about more disclosure? The FCC, for example, is proposing to require all Internet Service Providers to disclose a variety of information concerning “certain information about prices, introductory rates, data allowances, broadband speeds, and management practices, among other things.”

    Why not condition federal and state aid to colleges and universities to make certain disclosures, including the current and historical ratios of non-instructors to instructors, teaching loads by type of instructor (professor, associate professor, etc.), percentage increases in compensation by instructors and non-instructors including management and non-management, etc.? Disclosure would help parents and students make decisions and allow outside groups to make fact-based challenges to an institution’s operating practices. Bottom line – higher education needs to become more efficient and layoff higher-paid personnel who aren’t necessary to educating students or conducting funded research.

  9. M. Purdy Avatar
    M. Purdy

    I’m having a hard time understanding the overall point here. Is it that out-of-state grad school attendance is subsidizing the administrative bloat? If so, I think you would have to back out the numbers of the professional schools, in particular business and law, because of the autonomous nature of each (as stated). I believe neither receives state funding at all and has very comparable tuition rates for in and out-of-state students. When left with the remainder, how much are we talking about in terms of revenue? And does it matter? Med school is hugely expensive inherently. What else is left? I understand why in-state tuition is sensitive, but out-of-state folks paying comparable tuition to private schools is not a big deal. It’s a) the norm (look at California’s out-of-state tuition rates) and b) it means that UVa competes on even footing with private schools for out of staters. Again, a great value. Let the market work, “conservatives”!

    1. Let me lay the key links in my argument out for you.

      When critics of UVa governance accuse the university of supporting excess administrative overhead, a common response is: If UVa is so bad, how come it’s the second-best value among all public institutions?

      UVa has restrained the highly visible and politically sensitive metric of undergraduate in-state tuition not through budgetary belt-tightening but by pursuing two strategies: (1) maintaining a favorable ratio of students who pay the full freight versus those who require financial assistance, and (2) increasing enrollment for out-of-state post-graduate students who pay higher tuition than in-state students. Much if not all of UVa’s perceived superior value comes from tuition-and-admissions engineering.

      Bottom line: One can acknowledge that UVa is a “best value” university for in-state undergraduate students without crediting the University with taming administrative bloat.

      Any more questions?

      1. M. Purdy Avatar
        M. Purdy

        And let me repeat mine…how much are we talking about? Take out law, business, medicine…how much revenue do you think is funneled into administrative bloat as opposed to say hiring new profs, or improving facilities? You haven’t connected the relevant tuition differential to administrative bloat in any demonstrable way. Can you show the causal connection? Bottom line — your argument against administrative bloat falls flat because you can’t show how the excesses are impacting the product or demand for the school. You imply a lot, but never get to where you want. Just say what it is you want (less focus on diversity), and quit trying to connect the dots economically.

  10. DJRippert Avatar
    DJRippert

    “UVa’s Darden School of Business and School of Law are highly autonomous operations, nationally regarded as the most prestigious schools within the university …”

    Actually, not true according to US News & World Reports.

    UVa Law School is rated #8 in the US.
    UVa undergraduate business school (McIntyre) is rated #8
    Darden School (Graduate business) is rated #14

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