Students Be Damned, Taxpayers Be Damned

Pretty much since the dawn of time, Virginia’s public four-year colleges and universities have blamed soaring tuition charges on cutbacks to state support for higher education. So, this year the General Assembly funded significant increases in General Funding support, ranging from about 3% for the University of Virginia to 18% for the UVa campus at Wise. And in response, Virginia’s four-year public colleges dutifully reined in their increases for tuition and fees…

Har! Har! If you fell for that last line, you are truly a fool. As you can read in the previous post by Steve Haner, Virginia’s higher ed establishment jacked up tuition by roughly 6% on average, moderated by a somewhat more modest increase in mandatory student fees. The public colleges and universities did what they always do, which is charge as much as they can get away with.

In the chart above I show the T&F (tuition and fee) increase for each institution between fiscal 2018 and fiscal 2019, based on figures provided by the State Council of Higher Education for Virginia (SCHEV) and published in Steve’s post. Then I show the increase in state General Fund funding based on the budget submitted by outgoing Governor Terry McAuliffe. (Note: These figures do not represent the final budget approved by the General Assembly and signed into law, which I cannot find online. While the legislature might have tinkered with the numbers, however, they did not change significantly.)

Compare the two columns and you’ll see that UVa and Virginia Tech conducted themselves with restraint, hiking tuition & fees by the smallest percentages, even though the General Assembly gave them the most parsimonious increases in General Fund support. Every other institution raised rates in total disregard for the generous allotments bestowed upon them. Standouts were Christopher Newport University, which hiked fees by 8% in the face of a 5% increase in support, and Virginia Commonwealth University, which is extracting 6% more from its students despite a 5.3% increase in state aid.

Single year-to-year comparisons of state support can be tricky because sometimes the General Assembly throws in large sums of money to support strategically important programs such as, this year, cyber-security. George Mason University was the major beneficiary of that initiative, which may explain its 10.5% increase in state support. Also, it is important to view the actions of an institution this year in the context of their actions in previous years and in the context of state budget actions, such as cuts to budgeted state support made in response to a deficit scare in fiscal 2018. Therefore, a snapshot analysis like this should be viewed as preliminary and provisional for any given institution. But viewed as a whole, it is hard to avoid the conclusion that the higher ed establishment has hoisted its collective finger to Virginia’s students and taxpayers.

I have warned that continued aggressive hikes in tuition, fees and other expenses eventually would backfire on institutions with less illustrious reputations. I highlighted the risk that enrollments would decline, cutting sharply into revenues. So far, that hasn’t happened. Yes, I’ll confess… my fears have proven groundless. So far.

What’s happening? Enrollments are declining at many smaller, less prestigious private institutions. Private colleges lacking big endowments to fund hefty scholarships are more expensive to attend than public peers receiving state support, and they are losing students As long as the small, liberal arts colleges continue to bleed students, the publics may be able to pick up the refugees and continue jacking up tuition without repercussions. We’ll watch the numbers and see how they play out.

In the meantime, parents of college-bound kids should expect no easing up on the increase in tuition and fees at Virginia publics. There is no indication — none at all — that they are satiated.  All colleges and universities have ambitious plans to advance their institutional glory. No amount of revenue is ever enough. They will continue raising tuition and fees as long as the market will bear it and taxpayers remain quiescent.