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.

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6 responses to “Students Be Damned, Taxpayers Be Damned

  1. I enjoyed reading the link to the ten year old story on the same topic. About a year and a half later I wrote the new Governor McDonnell and said – I’ve never asked for an appointment before but please consider me for SCHEV. I then spent my four years baying at the moon on this issue, and was quietly not reappointed. At some point I wonder at the wisdom of beating my head against the same wall, but I felt the story needed to be put out there when I noticed the data over the weekend. The major variations in price prove this is all about pricing power and there is a weak relationship to cost of service. I may dig into that some more.

    No one has lost an election over this, or even faced a political opponent who used it as an issue, so the apathy at the General Assembly or on the executive level is somewhat understandable. On the other side of the equation the forces behind the hyper-inflation are major political donors. The long term effect has not (yet) been a serious drop in enrollment but the level of debt burden on recent graduates is having a negative impact on their finances for many years after they start careers.

    And it is important to note that there remain some institutions that seem to be keeping an eye on affordability. I would hold Virginia Tech up as a great national university, along with UVA and W&M, with far less of a price tag – about $40,000 less over four years than W&M. JMU, Radford and ODU are hardly cheap, but bargains compared to some others. I love the Alma Mater of our Nation down in Williamsburg, my school, but $100,000 for a bachelor’s from a state school is nothing short of obscene and next year’s (2020) freshmen will pay that. This year’s new students might, with coming fee hikes. As a proud graduate – it is NOT that much better than your other Virginia choices; it’s all just in their (our) swollen heads.

    • Why in the world should anyone be surprised by these most recent installments of soaring tuition hikes in Virginia higher education? The reasons for these hikes have been made plain time and again for years on this website in article after article.

      Why the hell should now we be shocked and dismayed? Instead of taking action to do something about fixing the problem once and for all, given that these are public institutions that are controlled by the state. The lack of state action to protect our students and our taxpayers appalling. This is particularly so given that we and our state representatives know what the problems are, why the problems recur year after year, and how to solve those problems that are baked into a corrupt system. That system must be replaced root and branch. But no one in a position of power has the courage and integrity to admit it, much less take action to confront the issues. This is a total failure of honest and responsible governance.

    • I think it has been brought up before on this blog, but UVA and W&M are executing a limited high tuition/high aid model, similar to what private schools have been doing for some time. The result is both schools actually have lower net prices for lower income and some middle income students than Virginia Tech. W&M, for instance, has a lower net tuition than VT up to incomes of $90K for in-state students according to SCHEV data. I’ve never figured out how to paste graphics in comments, but you can see it on page 11 in this presentation from Sarah Turner, a UVA professor.

      We can discuss whether this high tuition/high aid is good policy, but I believe improving affordability for lower and middle income families was one of the objectives of the Restructuring Act.

      One other note. W&M freezes tuition for a class for 4 years, so its increase is significantly less than this indicates. This was reflected in Steve Haner’s blog post.

      • As regards higher education, I value one thing and one thing only: the quality of the higher education that is received by enrolled students. Our current system of “higher education” is failing miserably at this mission. The reasons for this gross failure are many, and pervasive, full of rot at all levels. I estimate that only 10% of a typically student’s tuition goes toward the quality of his or her education inside and outside the classroom. This is a national scandal. It must stop.

        Every student’s tuition at a public college or university should by law go directly toward the education of that student in and outside the classroom. To do otherwise commits a fraud on that student. That fraud on today’s students is massive, the rule in today’s higher education, not the exception. And it is intentional so. The system is designed to perpetuate that fraud.

  2. As we make our way across the country and back – I observe significant variations in price for some things that are exactly the same. Gasoline, campgrounds and Motels are three.

    It’s simple economics – supply and demand. The very same motel that costs $65 in Fort Scott – costs 4 times that much in Tusayan (South Rim of Grand Canyon). Similarly – gasoline at out-of-the way places can cost a dollar more per gallon – same gasoline.

    So I think for Higher Ed – that’s the core – irregardless of how much money they get from taxpayers. They’ll charge as much as they can get and the excess
    gets plowed backed into their programs that they think will appeal to the herds and actually maintain or increase demand.

    And just like Walmart cannibalizes smaller and weaker competitors – so does Higher Ed….

    Want to stop higher ed from doing this? Au Contraire! You can no more stop Higher Ed than you can Walmart or Amazon! It’s the economy, stupid!

  3. By the way – off topic – a request to Jim B or his fellow bloggerets:

    Headline in WSJ:

    ” The Problem With Innovation: The Biggest Companies Are Hogging All the Gains
    Economists trying to explain a long-term slowdown in productivity increasingly believe gains are not spreading through the economy, as they once did”

    ” As far back as the industrial revolution, major innovations have traveled swiftly from company to company and industry to industry, an economy-boosting phenomenon called diffusion.

    Today, there is mounting evidence this engine of growth seems to be misfiring, a phenomenon some economists say helps explain the slowdown in productivity growth bedeviling developed economies.”

    How about it? If true – this is a big problem… and eventually could affect Higher Ed because education is supposedly about – productivity also…….

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