When the Board of Visitors met last week, one of the issues it addressed was maintaining the Commerce School's prestige at a time when its faculty salaries and technological infrastructure are falling behind those at peer institutions. Although the tuition differential of $3,000 that the Board decided to charge every third-year student who enters the Commerce School in 2011-12 may not be what parents and students had in mind, it is nevertheless an appropriate response to the school's short-term funding needs. With this differential now in place, the Commerce School must determine whether it intends to forge ahead with an independent financing model or redouble its efforts to seek increased state money in the future.
The Board's decision regarding the tuition differential balances the competing ideals of quality, fairness and affordability. In its first year, the differential will generate $975,000 that can be put toward boosting faculty salaries so that they are in line with the 60th percentile salaries of the Association of American Universities. This will ensure that the Commerce School remains able to earn the high marks in teaching quality that have kept it in the top two of Bloomberg Businessweek's undergraduate business school rankings for the past five years.
Furthermore, those paying the differential also will be the ones benefitting the most from it. By instituting a differential - something already in place at other Businessweek Top 10 undergraduate business schools, such as those at the University of Michigan and the University of Texas - the Board avoided having to siphon off tuition money from other undergraduate students at the University for the purpose of keeping the Commerce School competitive. Finally, the Board took the added step of making the differential eligible to be covered through AccessUVa, the University's financial aid program that meets 100 percent of demonstrated need for undergraduates. The Commerce School administration also has indicated that "a significant portion of annual tuition revenues generated from the differential" will be dedicated to bolstering AccessUVa.
This does not mean, however, that Rector John Wynne was correct to suggest that the fee will not "burden people in any significant way." After all, financial aid programs such as AccessUVa do less to alleviate the financial stress of college for middle-class students who rarely qualify as having "demonstrated need." The tuition differential still represents a hefty 13 percent increase to the $22,543 total expected cost for an entering in-state pre-Commerce student whose family earns more than $44,700, which is the cutoff for no-loan financial aid for a family of four. Even if some of that is compensated for through loans, the attendant interest payments would be enough of a burden to make the differential more than a minor annoyance for middle-class families already struggling to cope with baseline tuition. Moreover, the total expected cost does not account for additional tuition and fees increases the Board may enact later this spring, once Gov. Bob McDonnell signs into law a budget that provides for specific state funding allocations to higher education.
Therefore, the decision between an independent financing model driven by private donations, fees and tuition surcharges and one that relies heavily upon the state is not likely to be an easy one. There are several cases in which the former approach has proven to be successful, however, notably at the University's Darden School and Law School. Both of these graduate programs are financially independent except for a small subsidy from the state to provide for marginally lower in-state tuition, and they both consistently rank among the elite institutions in their respective fields. The Commerce School will have to consider whether such a model is also suitable for an undergraduate program at a public university.
In the end, however, the path that the Commerce School follows may be determined by state legislators if they continue to cut state funding for the University. If the school chooses to free itself from the whims of policy-makers, it must continue to recognize that coordinate to its commitment to quality is a responsibility to provide the financial assistance necessary to allow all who are qualified to experience it.
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