RD203 - 2008-09 Tuition and Fees at Virginia's State-Supported Colleges and Universities


Executive Summary:
The Commonwealth of Virginia, like the rest of the nation, is once again in an economic downturn. This time the economic cycle had a very short boom period, lasting only four to five years as compared to previous economic cycles that ran for about 10 years. Due to a state budget shortfall, the Governor found it necessary to reduce the 2007-08 general fund appropriations by 5% in the fall, as well as an additional 0.5% cut in early 2008. However, Virginia public higher education institutions were spared from the second budget cut. This was because higher education shouldered a larger share of budget cuts in the last round of general fund reductions in the 2002-04 biennium, which resulted in dramatic tuition increases and greatly affected higher education affordability in Virginia.

By statute, each institution’s board of visitors has the authority to set tuition and fee rates. However, the Governor and General Assembly frequently establish explicit or implicit tuition policies and goals for the state. Between 1994 and 2004, tuition and mandatory educational and general (E&G) fees for in-state undergraduates were, at various times, capped, frozen, or reduced. In 2004-05, the General Assembly returned authority to the boards of visitors to set tuition charges at levels they deem appropriate for all in-state student groups based on, but not limited to, competitive market rates. However, the policy provided that the total revenue generated by the collection of tuition and fees from all students must be within the nongeneral fund appropriation for educational and general programs.

In an effort to ensure moderate tuition increases, the General Assembly established the Higher Education Tuition Incentive Fund in 2007. Institutions were eligible to receive their share of a total $7.2 million from the general fund if they limited their in-state undergraduate tuition and E&G fee increase to no more than 6% for 2007-08. This year, the 2008 General Assembly continued the incentive fund concept with the Tuition Moderation Incentive Fund (TMIF) by providing $17.5 million general fund each year of the 2008-10 biennium. Institutions are eligible for this fund if they limit the in-state undergraduate tuition and E&G fee increases to no more than 4% in 2008-09. As a result, next year, tuition and mandatory E&G fees for in-state undergraduate students will increase by 6.5% on average. These charges increased by 6.3% in 2007-08. Tuition and all mandatory fees, including both educational and general and noneducational and general fees, will increase by 7.3% in 2008-09, as compared to an increase of just under 7% in 2007-08.

This report, focusing on tuition and fees for in-state undergraduates, provides a summary of: 1) board-approved tuition and fee increases for the 2008-09 academic year; 2) tuition and fee trends in Virginia over the past 25 years; 3) the cost-sharing relationship between the state and students; and 4) trends in tuition increases nationally. Additionally, a comparison of planned and actual tuition increases is provided. Comparisons of changes in tuition and fees for other student groups, including in-state graduate, out-of-state undergraduate, out-of-state graduate, in-state first professional, and out-of-state first professional, are provided in the appendices.

In order to assess trends in tuition and fees, it is important to understand higher education pricing. A student planning to attend a public college or university in Virginia can expect to pay the charges defined below:

1. Tuition and Mandatory E&G Fees: Mandatory student charges used to support instruction and related education activities included in the Education and General (E&G) program. E&G subprograms include instruction, research and public service, academic support, student services, institutional support, and the operation and maintenance of physical plants.

2. Mandatory Non-E&G Fees: Mandatory student charges used to support non-instructional activities such as student health services, athletics, recreational activities, campus transportation, and capital debt service.

3. Tuition and All Fees: Sum of tuition, mandatory E&G fees, and mandatory non-E&G fees.

4. Room and Board: Optional charges used to support the dormitory and dining functions for students choosing to live on campus. Students living off campus are exempt from these charges.

5. Total Cost: The total cost to students and parents – absent student financial aid. It includes the sum of tuition, all mandatory fees, and room and board.