Last April, the University of Virginia's Board of Visitors raised the in-state tuition rate by about 9.9 percent - a substantial increase - to help cope with the loss of state and federal stimulus funds. Although this raise may have seemed dramatic to current students, those attending Virginia Commonwealth University found themselves staring down a 24-percent hike, a move from the school's governing board that has recently drawn the state's ire.
Gov. Bob McDonnell proposed last month to withhold $17 million of funding from the school - half of what the increased fees generated - to signal to state schools that such significant increases are unacceptable. In a speech before the General Assembly, McDonnell reiterated his philosophy: "We need to see a reduction in the rate of increase in these tuitions ... The VCU Board [of Visitors] approved a 24-percent rate increase for kids at VCU last year. And it is unacceptable. I've made a challenge to the budget and I've only appropriated half of that general fund revenue back to the university in anticipation of a different board action this spring when they consider future tuition increases."
The reality, however, is that the economy has hit state universities hard. In response to McDonnell's proposal, VCU President Michael Rao released a statement outlining the circumstances of the tuition increase, which was in large part passed to address the gap in state funding. "The loss of federal stimulus money combined with significant state reductions in financial support set the table for the board's action," Rao said. "VCU faces a $42.4 million funding cliff between this and next fiscal year - the largest of any state university in Virginia." State schools are being squeezed from every corner, and to expect them not to raise tuition - particularly given the decrease in state funding - is naive.
Like VCU, the University of Virginia similarly was forced to make up for an $11.2 million decrease in its 2009-10 academic year budget. But unlike the University, whose undergraduate population is 70 percent in-state, VCU is home to a staggering 90 percent in-state students. Consequently, VCU takes in less revenue from out-of-state tuition, which is typically used to subsidize that of in-state students. Affordable access to higher education is always desirable, but revenue has to come from somewhere. Charging below-market rates for that education is simply unsustainable in the long run without a more generous public subsidy.
Moreover, VCU still has one of the lowest tuition rates in the state. Tuition at George Mason University falls just below VCU's $8,717 at $8,484, but both are a far cry from the $12,188 annual in-state tuition charged at the College of William & Mary and the $10,628 price tag at the University.
Still, the tuition hike likely blind-sided a number of students who had already matriculated and likely did not anticipate such a steep increase during their college years. And unlike the University, which strives to meet 100 percent of demonstrated need through financial aid, VCU is only able to meet 60 percent.
One way to avoid excessive tuition hikes and soften the blow for current students is to institute a fixed-tuition program, similar to that implemented at George Washington University. The program guarantees fixed tuition for 10 semesters of a student's undergraduate career assuming students remain in good academic standing. For one thing, it gives incoming students peace of mind and a better forecast for the costs they will incur during their entire undergraduate careers. But even that program has adverse consequences. In fact, tuition rose 16 percent when GWU instituted its policy in 2004 to compensate for expected cost increases during the subsequent four years. One alternative to locking in a particular tuition rate is to limit how much that rate can spike during a student's undergraduate years. For example, a 5 or 10 percent increase may be permissible, while a 20 percent hike would not be.
Although McDonnell's goal of making college accessible and affordable for Virginia students is well-intentioned, his proposal to slash VCU's state allocation loses sight of the difficult circumstances that universities face. The quality of education students receive would seem to be every bit as important as simply processing more students into degree programs. If that is the case, state officials cannot ignore the plight of these institutions simply to appease constituents. Making an example out of VCU to discourage it and other schools from hiking tuition may send a strong message, but it will hurt one of the state's largest public universities - one that is already buckling under fierce financial pressure.
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