VUU’s $5,000 Tuition Reduction Gambit

by James A. Bacon

Wow! Virginia Union University, a private, historically black university in Richmond, has announced that it will slash undergraduate tuition from $15,530 to $10,530 (not including the $1,753 in fees) — or 32% — in the fall of 2020. Room and board can add another $10,000 to the cost of attendance, depending upon the option chosen.

“We realize how crippling student loan debt has become for students nation-wide,” said Dr. Hakim Lucas, President & CEO of Virginia Union University. “Students enroll in college seeking a career path that will allow opportunity for long-term financial stability. However, they end up spending most of their working years paying back student loans. Virginia Union is doing what it can to ensure that students in the Commonwealth and across the nation have access to an education that will equip them with the tools they need to be successful, while avoiding the crippling bill waiting at the other end of graduation.”

While the cost of undergraduate tuition will go down, VUU will increase tuition for master’s or doctorate programs.

Bacon’s bottom line: A 32% tuition cut is a big deal. The first question that occurs: What drove the board of trustees to such an action? College boards rarely suffer crises of conscience over tuition hikes; they normally charge what the market will bear.

VUU is spinning the reduction as a positive response to students’ financial hardship. Somehow, financial hardship didn’t stop VUU (or any other university, public or private) from jacking up tuition in the past. Could the university be responding to adverse market conditions?

Well, from the look at VUU’s freshman admissions figures (courtesy of the State Council of Higher Education for Virginia database), it appears that the answer is yes.

In a period of declining college enrollments nationally, VUU suffers from a double drawback: It is an HBCU and it is a small liberal arts institution. As every higher-ed institution — large, small, public, private, elite, non-elite — tries to increase the enrollment of minorities, HBCUs are suffering more intense competition than ever. As a small liberal arts university, it falls into the category of higher-ed institutions experiencing the greatest loss of students (regardless of race).

The collapse in enrollment last year had to have been alarming to the board of trustees. The university accepted about half of all the kids who applied — 2,759 in all. But only small fractions decided to enroll (9.4% of in-state applicants and 5.4% of out-of-state applicants). The result: only 201 new freshmen, a third of the number in the 2009/10 academic year.

Another alarming development: 64% of the entering freshmen with SAT scores had scores below 800 (out of 1600). That compares to only 25% of students with SAT scores who scored so low two years previously.

Clearly, the board concluded that tuition was a significant barrier to enrolling new students. In the state of Virginia, it is competing against Norfolk State University and Virginia State University, both of which benefit from generous state support. A $5,000 tuition cut represents a big loss of revenue, but every student brings in not only tuition revenue but revenue from room and board. If VUU can boost its student enrollment back to the 400 to 500 range, the cuts should be revenue positive.

It goes without saying that the tuition cuts benefit the students. For the sake of VUU’s long-term viability, let’s hope the board’s gambit works.

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6 responses to “VUU’s $5,000 Tuition Reduction Gambit”

  1. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I also took note of this story. It is striking that VUU’s tuition next fall will be significantly lower than the current annual tuition at state-supported VCU, $14,596, which is almost next door to VUU. It will be interesting to see if the lower cost can pull students, black or white, from VCU.

  2. LarrytheG Avatar

    There may be something along the lines of “you get what you pay for” if the cuts were made to programs – that’s the appeal of larger Colleges – they often have wide and deep and able to handle smaller groups for some programs. At a smaller school, only 5 people signing up is not going to work economically.

    The other thing is to wonder if room&board is a “profit center” for colleges. Can a student live off campus in a cheap apt with others and eat beans and franks for less than “room&board”? I know personally the beans & franks routine.

    Also – back in the day – it was the parents job to put together a “college fund” when the kid was born… and I also know folks who did just that – no debt… prepaid college – part of being a responsible parent when he/she decides to have kids. Then the kid was supposed to NOT go to an expensive college, get academic scholarships and work sides jobs to help pay.

  3. Yes, the housing ‘profit center’ concept is worrisome. So is the notion that slashing tuition — the income stream that is supposed to pay for the quality and quantity of the faculty — can be accomplished without harming the school’s educational mission. Is this the road to survival, or a shell game?

  4. LarrytheG Avatar

    I think the major Colleges and Universities are in a de-facto Higher Ed “arms” race.

    It’s not a conspiracy to add more and more administrators and teaching staff – it’s to build enterprises that have high appeal to parents and kids. They build the “package” which includes not only wide and deep academic offerings but cool dorms, dining halls that are like restaurants, and big time sports.

    Make no mistake, there are a ton of small colleges with limited programs and minimal sports – and those small colleges are a dying breed because most kids don’t want to be there – they want to be at a “name” University.

    And as long as parents and kids are willing to pay for it – no matter how loudly they complain about costs – they will continue to pay for it especially if loans are pretty much automatic.

    I STILL think contemporary folks have lost their freaking minds.

    Parents USED to SAVE money toward their kids college – and actually encourage their kids to be frugal , to pitch it and take some responsibility for the costs by working job to help pay for costs instead of going into deep debt that causes direct harm to their financial security after school.

    Back in the day- a lot of folks set up a college fund on the day their kid was born! It was a part of the process of having kids!

    I just don’t understand how we have so many folks these days that are just plain irresponsible with regard to finances and college – from day 1 to the point the kids enroll. It’s like a right of passage – the cost be damned.

    Even IF the Colleges actually are ripping people off – who in their right mind goes into huge debt anyhow?

    If you have kids – part of your responsibility is to fund college for your kids AND to teach them to be financially responsible.

    Instead – we have parents aiding and abetting just grossly irresponsible attitudes about College and debt…

    And the thing is – a basic college degree – without regard to the economy – is dumb. The basic “liberal arts” degree of old will not get you a decent 21st century job… you actually have to have more on the ball academically – these days – the degree is no longer your “ticket” to a career… I know people washing dishes in Olive Garden that graduated from a major University but their degree was political science… and they evaded every course in math and science…

    Colleges and Universities – just like car dealers and home sellers – they’re going to charge according to demand – and they’re going to use their profits to build even bigger and more appealing products!

    Anyone who claims to be a “thinking” free-market person – should well know this.

    Higher Ed is a product – just like Tide or Chevy… that’s the reality.

    you want lower prices – refuse to pay higher prices.. just like anything else..!!!

  5. Atlas Rand Avatar

    It may not be a popular opinion, but perhaps the best option is to close the doors? I’ve hardly seen VUU considered a viable destination, and there is little likelihood of it significantly poaching students from VCU. I’d also caution that students with SAT scores in the 800 range likely need remedial high school courses and should not be in college at all.

  6. Unfortunately, 200 in a class is not sustainable. Schools with less than about 2,000 students, unless they are really well endowed, have a cost structure that is too high.

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