Virginia’s state-supported colleges are bloated with administrators. The skinflint General Assembly has cut funding to higher education. And tuition is soaring out of control.
All that’s true, right?
Wrong.
The legislature’s watchdog agency this week produced a 157-page report that methodically undermines some popular notions about the state of higher education in Virginia. The report is entitled “Spending and Efficiency in Higher Education.” I realize the word “efficiency” is likely to send shudders through a lot in academia, but most of this report seems pretty complimentary.
Let’s hit the highlights.
1. Student costs have increased but are now declining
The cost of attending a state-supported college in Virginia peaked in 2020 but is now declining, the report from the Joint Legislative Audit and Review Commission said. Over the course of the past decade, the published cost of attending a state-supported school in Virginia has risen 5% in inflation-adjusted dollars. That’s an increase, to be sure, but it could have been a lot worse.
2. Relative to inflation, most state-supported schools have reduced their net price
Only four of Virginia’s 15 state-supported schools have seen their net prices rise relative to inflation: the College of William & Mary, Longwood University, Radford University and the University of Mary Washington. Christopher Newport University has seen its net prices fall the most, relative to inflation.
3. Increased state funding has helped hold down tuition
State appropriations for higher education have risen by 36% over the past decade, the report said, with most of that increase coming since 2018. “This increase in appropriations has contributed to the total cost of attendance declining, on average, across institutions,” the report said.
You can still make the case, if you’re inclined, that the state still isn’t spending enough. A separate report from JLARC this week detailed aging or insufficient facilities at some schools, particularly at Mary Washington and Virginia State University. However, here’s evidence that the funding provided so far has had the desired effect: to make higher education more affordable. Legislators can congratulate themselves on that. Students and their parents ought to congratulate legislators.
4. Spending at state colleges has increased, but the biggest driver of increased spending has been instruction
Spending at state colleges has gone up 64% over the past decade, the report said. That increase was driven primarily by instructional costs.
Sometimes you have to state the obvious, as this report does: “Instruction is the primary mission of higher education in Virginia, meaning spending growth in this category is less concerning than in other areas.” Maybe some schools do have bloated administrations, that might be a matter of opinion, but at least instruction is what’s driving cost increases, not other things. Instruction is also the single biggest cost at state-supported schools. On the other hand, that increase in instructional spending is only a minority of overall spending increases. In all, instruction accounts for 28% of the costs.
There’s also this:
5. Just four schools accounted for more than 3/4 of that spending increase
These spending increases are not across the board. “Four institutions accounted for 77 percent ($758 million) of inflation-adjusted spending growth statewide from FY14 to FY23 — UVA, Virginia Tech, GMU, and VCU,” the report said. Further, “three institutions decreased their inflation-adjusted spending during that time — Longwood, Radford, and Mary Washington.” When has a state agency ever reduced spending? Of course, that was also driven by enrollment declines.
6. Declining enrollment at some schools doesn’t necessarily mean declining costs
Many costs are fixed no matter how students enroll: Debt service on buildings, paying to heat and cool those buildings and even many staffing costs are fixed, the report pointed out. Some classes might have low attendance and would be candidates for elimination — except that some of those are required for accreditation purposes. When looking at “efficiency,” the main driver of efficiency is high enrollment and the main driver of inefficiency is low enrollment, the report said. That’s why “the 10 institutions where enrollment declined between FY14 and FY23 all currently spend more per student than they did 10 years ago” — they often can’t reduce certain costs and must spread them across fewer students.
An illustrative but hypothetical example: A big school can have one professor lecture to an auditorium full of 100 students. A small school might have a professor teaching the same class to 10 students. Both schools have the same expense for the instructor but the larger school has a smaller cost-per-student basis.
7. Virginia’s colleges are more expensive than ones in other states, but there’s a reason for that
The published price at Virginia’s state-supported schools is 9% higher than public institutions nationwide, the report said. The net price for an in-state undergraduate in Virginia is about 21% higher than at public schools nationwide. However, JLARC calls these figures “misleadingly high.” Virginia schools tend to be more expensive, the report said, for three reasons:
- They conduct more research than state schools elsewhere.
- They have more residential campuses to support.
- They offer more higher-level degrees. (Every state-supported school in Virginia has a graduate program except one — Virginia Military Institute.)
When you factor all that in, the report said, Virginia’s state-supported schools are in line with their counterparts elsewhere. The report found only four Virginia schools that spend more than their out-of-state counterparts, and there seemed a logical explanation for each one. The University of Virginia conducts a lot of research and can draw on a healthy endowment for additional spending. William & Mary’s spending is inflated partly by its Virginia Institute of Marine Science. The University of Virginia’s College at Wise has seen spending increase as it’s added programs in a rural part of the state that doesn’t have any other four-year state school nearby. Meanwhile, “Longwood’s spending on auxiliary functions, such as athletics and housing, accounts for the entirety of the difference in its spending with similar institutions.”
On the flip side, six Virginia schools are spending less than their counterparts nationwide: George Mason, James Madison, Mary Washington, Old Dominion, Virginia Commonwealth and Virginia Tech. In some cases, that’s a lot less. VCU is spending 30% less than counterparts elsewhere. For these six schools, this report gives a powerful talking point for more state funding (although some might also argue that maybe they don’t need it because they’re pretty darned efficient right now).
So far, all this may sound too good to be true. Let me assure you that JLARC is a straight-arrow operation. Perhaps the most dreaded words at any state agency is “JLARC investigation.” It’s the state equivalent of an Internal Revenue Service audit. To be sure, the agency found some things to be critical of.
8. Most of what students pay is for fees, not tuition
Tuition is often the headline item, but that’s less than half of the total cost students might pay. Room and board and other fees account for more than 60% of the published price of attending college, the report said. “For example, Longwood’s tuition remained mostly flat in inflation-adjusted terms compared to a decade ago, but its total net price increased because room and board and non-E&G [education and general] fees increased by over $2,000 during the same time period,” the report said. “Similarly, Mary Washington lowered tuition in inflation-adjusted terms, but that has been offset by an increase in non-E&G fees since FY14.”
Speaking of those fees …
9. At seven schools, students pay $2,000 or more a year for intercollegiate sports
More to the point, they pay $2,000 or more for intercollegiate sports that they probably don’t play. This raises a philosophical question. As part of their student fees, students pay for lots of things they may not use. Some may never need the student health center, although at least in theory, they might need to, so it’s good to have one there. However, if a student is not a scholarship athlete, the odds of suiting up to represent their school are pretty darned low. Why then must students pay anything to have an intercollegiate sports program? As a society, we’ve said sports are important and intercollegiate sports are an important part of the overall “vibe” at a school. There’s also a big difference between, say, the football and basketball programs at Virginia Tech (which feel more like a professional sports operation) than their counterparts at smaller schools where the players are never going to make it to the pros.
Feel free to debate all that. On a purely objective basis, students at smaller schools generally pay more for intercollegiate sports than students at bigger ones (where there are more students to cover the cost and more deep-pocketed alumni to pay for such things). State law now limits “the proportion of overall athletics revenue that can be funded through institution subsidies,” the report pointed out. “However, because the limits are based on a percentage of overall revenue, student fees and institutional funds for collegiate athletics can still grow as athletics revenue grows.” JLARC suggests that the General Assembly should go further and put a cap on what students have to pay for college sports.
10. Even with net prices falling, students still graduate with a lot of debt
More than half the students at state-supported schools — 54% — have to borrow money to go there, the report said. They typically graduate with a debt of about $30,000, up 15% over the past decade. The report notes that many figures on student debt don’t include those students who don’t or can’t complete their degree, but owe bank loans anyway. Thought experiment: How much less would that debt be if students didn’t have to pay any fees to support intercollegiate sports programs?
11. The students with the highest levels of debt are HBCU graduates
At the University of Virginia and William & Mary, fewer than 40% of the students have to borrow money to attend. At the state’s two historically Black institutions — Norfolk State and Virginia State — more than 80% do.
12. Schools aren’t funded equally
OK, this isn’t a surprise. Some schools are bigger than others. Some have more expensive programs to support. Some, frankly, have more influential alumni and better connections with legislators. Life is unfair. Nonetheless, here’s a fascinating chart — it shows which schools got the most funding but also the percentage increases in that funding.
You can read this lots of ways. Virginia Tech gets the most money but has seen the slowest increase in funding (17% over the past decade). Is that a good case that Tech needs more funding, or is it doing just fine? The biggest funding increases have come at Virginia Military Institute (84%) and Virginia State (75%), but they’re also working from smaller budgets, so it’s easier to get a larger percentage increase. On the one hand, legislators can make the case that they’ve been responding to underfunding at Virginia State; on the other hand, VSU supporters can also look at this chart and make the case that the school should be funded at higher levels. A note: The University of Virginia’s College at Wise doesn’t show up on this chart because its funding comes as part of the overall University of Virginia appropriation.
13. Some schools are more dependent on state funding than others
Here’s another chart you can read multiple ways. Does this show that state funding is insufficient? Or does it show that most of these schools have done a good job developing other sources of revenue beyond what’s in the state budget? Another way to look at this chart is to understand how dependent three schools are on state funding: Virginia State, Norfolk State and the University of Virginia’s College at Wise. That’s because they’re dealing with less affluent students, so they can’t make up the difference with tuition; nor can they call on fat endowments or lots of well-heeled alumni.
Note that schools have other sources of revenue. JLARC didn’t include a chart for that but did provide some useful commentary: “State appropriations comprised less than 25 percent of total revenue from all sources at UVA (13 percent), Virginia Tech (18 percent), William & Mary (20 percent), JMU (22 percent), and GMU (24 percent) in FY23. In contrast, state appropriations made up 47 percent of revenue from all sources at Virginia State, Norfolk State, and Radford; 42 percent at ODU; and 41 percent at Mary Washington.”
In any case, the increased state funding cited above has mattered: “State appropriations made up a larger proportion of revenue systemwide in FY23 than a decade ago, making up 17 percent of total higher education revenue in FY14 and 23 percent in FY23,” the report said.
14. Should boards of visitors be instructed to consider costs?
The report points out that in some states, governing boards are required to keep student costs in mind. Florida is especially adamant on this point, the report said: “When establishing a new fee or increasing an existing fee, Florida requires higher education institution boards to consider whether operations can be made more efficient and whether resources other than charges to students can be used to cover costs.”
JLARC suggests Virginia do the same: “The General Assembly should amend the Code of Virginia to expressly obligate current and future boards of visitors to consider spending efficiency and student costs when managing and approving institutional budgets and setting tuition and fees.” I suspect that might not be popular in some quarters.
For JLARC’s companion report on enrollment, the agency surveyed the boards of visitors at each state-supported school. The response rates varied widely: At Norfolk State, 85% of the board members responded. At Virginia State, 80% did. But at the University of Virginia, only 29% did, and at Virginia Military Institute, just 12% did. That’s just two of VMI’s 17 board members. Why aren’t the people with fiduciary responsibility for state colleges not responding to the General Assembly’s watchdog agency? If they were students not turning in a class assignment, that would be an “Incomplete” at best.
The politics of storm relief
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