IG of the Day: Virginia Colleges More Unaffordable than Ever

Source: SCHEV. Click to enlarge image.
Source: SCHEV. Click to enlarge image.

The plundering of the middle class continues unabated. The State Council for Higher Education in Virginia (SCHEV) has tallied the numbers and found that in-state undergraduates at Virginia’s public colleges and universities will see a 5.1% average increase in tuition and fees this fall. That exceeds last year’s 4.5% rise, despite an additional $25 million in state aid in the current fiscal year.

The increases make college more unaffordable than ever. As seen in the chart above, total charges, including room and board, for students at four-year colleges now absorb 46% of per capita disposable income — up from 32.2% in 2001-2002.

With every passing year, colleges and universities become riper for wholesale disruption by upstart institutions with lower-cost business models. The modern-day university serves multiple constituencies, the least powerful of which under the current mode of governance are the students. At some point, students will revolt — not by staging 1960s-style sit-ins but by refusing to show up at all.


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5 responses to “IG of the Day: Virginia Colleges More Unaffordable than Ever”

  1. actually it’s the same problem that caused the housing bubble and that is that loans are available and the colleges know the services they sell will be paid for.

    and I would also say that it’s not just the public Universities and Colleges – it all education providers and the for-profit one are even more willing to charge outrageous prices for truly substandard products.

    we see this right now with the GI benefits that are ripe fruit for the picking for – for-profit education companies.

    then we want to extend this in even worse ways with vouchers made available to for-profit providers.

    it’s not the public university/college – it’s ALL entitles that ‘sell’ education.

    all of them are rent seeking and we are more than happy to connect a money pipeline to their back door even as we criticize them for doing little more than pricing their product per the demand.

    As long as we have cheap loans and as long as people are willing to go into hock for thousands of dollars – there will be “expensive” education providers.

    the blame is on us… we can’t wean ourselves off of govt subsidized loans and tax credits and the education providers know it.

  2. Peter Galuszka Avatar
    Peter Galuszka

    “More Unaffordable than Ever?” My, my, what a loaded headline. Actually Virginia public ed is a bargain.

  3. One day, Peter, you will look back upon your life and remember the wild Woodstock-attending radical you once were, and you will think, “OMG, somewhere I morphed into a defender of the status quo! I have become what I once ridiculed! Oh, woe is me!!”

    You will rent your garments and heap ashes upon your head. Then you’ll have to find a tailor to fix your clothes and buy an expensive bottle of shampoo to get the crud out of your hair. You’ll be sorry, oh, yes, you’ll be sorry.

  4. just fyi – here’s an excerpted list of countries with
    percent of GDP spending on education:

    Denmark 7.8
    Iceland 7.4
    Norway 6.8
    Sweden 6.6
    Barbados 6.6
    Argentina 6.5
    Bolivia 6.3
    Costa Rica 6.3
    New Zealand 6.1
    Belgium 6
    Finland 5.9
    Israel 5.9
    France 5.6
    Saudi Arabia 5.6
    United Kingdom 5.5
    United States 5.5 <——————
    South Africa 5.4
    Netherlands 5.3

  5. Breckinridge Avatar

    Larry — I suspect 5.5 percent of the US’s GDP actually blows away most of the countries on that list. It might be a bit more money per capita than 6.3 percent of Costa Rica’s and 5.6 percent of France’s. And remember how much of what those countries’ spend is spent in the good ‘ol US of A. Interesting to see four Scandinavian countries at the top though.

    But affordability is a dead issue. Virginia’s top tier institutions, W&M, UVA, VT, are all chomping at the bit to charge what the market will bear in the case of out-of-state rates, they are. W&M with is changed tuition scheme is making a big move toward charging what the market will bear in-state as well, and the reality is their enrollment will not suffer. They would happily forego any state revenue, ramp up their tuition, ramp up their in-house socialism of making some students pay the tuitions for others, and pad their executive suite salaries to the max.

    A huge shake up in higher ed is coming and you are already seeing low tier institutions struggling to fill up incoming classes. W&M, UVA and VT expect to survive and win in the competitive environment to come. NSU and VSU are already show signs of potentially fatal stress. The schools in the middle –Radford, Longwood, Christopher Newport, Mary Washington — I expect within five years they will be finding it hard to fill the classes with the same caliber of paying student.

    The coming crunch is demographic, with fewer students coming out of the high school pipeline and a higher percentage of them in minority groups that do not traditionally consider college (even if they could afford it.) And there is also the technological revolution, which will challenge the traditional four-year-on-campus model of the last century. Many, many schools will disappear and many more will be absorbed by merger.

    State budgets are dominated by Medicaid and K-12, which in turn is stressed by special education. The political leaders clearly place higher ed on a lower priority than it enjoyed 30 years ago, again, perhaps because of the aging and changing ethic nature of the voting population. McDonnell was an exception but did not put as much into higher ed as it would have taken to make a big difference — and he did NOT really clamp down on the school’s appetite for tuition and fees. Look at what VCU did this year, just a couple of year after a severe public up-brading. Bragging that tuitions only went up twice the rate of inflation is definitely a case of whistling past a graveyard.

    So watch the population at the four years, public and private, start to plummet over the next five years. Price will be a major factor along with demographics and technology.

    My hope is that the gap will be filled by associate’s degrees and technical training related to actual job skills. Fewer sociology majors actually might be a good outcome.

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