RD176 - 2012-13 Tuition and Fees at Virginia’s State-Supported Colleges and Universities


Executive Summary:
After several years of severe state budget cuts and substantial increases in tuition as public institutions attempted to fill their budget gaps, the Governor and General Assembly have made a concerted effort to reverse the downward trend in state support for higher education. The 2012 General Assembly increased general fund support to higher education by $65 million in FY2013 and $83 million in FY2014 for educational and general programs (E&G). That brings the total additional general fund support to about $150 million for the 2012-14 biennium—a notable reinvestment in public higher education by the state. As a result, Virginia’s undergraduate students entering public colleges and universities in fall 2012 will experience the lowest tuition and mandatory E&G fee increases in a decade—an average of 4.5%. For tuition and all mandatory fees, the increase for FY2013 will be 4.1% on average which is also the lowest annual increase in a decade. Both increases are substantially lower than the increases in FY2012.

The state’s reinvestment in higher education for the next biennium will help public institutions meet the requirements of the Virginia Education Opportunity Act of 2011, also known as TJ21. This landmark legislation proposed by Governor McDonnell calls for an additional 100,000 college graduates by the year 2025 to help ensure that the Commonwealth has the resources it needs to compete successfully in the marketplace of the future. The legislation also requires Virginia’s public higher education institutions to become more efficient in their operations and to reallocate funds to support research and innovation.

The improvement in the Commonwealth’s economy in recent years has made the reinvestment in higher education in the 2012-14 biennium possible. While the final budget report for FY2012 was not available at the writing of this report, the Commonwealth general fund revenue has exceeded forecasts consistently since February of this year. While the state is no longer in recession, headwinds in the broader national economy are still a cause for concern. National economic growth continues to be sluggish. Further, a negative outlook for federal spending poses a significant downward threat on revenue growth in the Commonwealth. Virginia is considered to be one of the most vulnerable states to federal spending cuts because of our dependence on defense spending and the large number of federal employees that live and work in Virginia.

The timing of the state’s reinvestment in higher education comes at a crucial juncture for Virginia’s public institutions as it coincides with the end of financial support from the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA was an economic stimulus package worth $787 billion created by Congress and signed by the President in 2009. During the recession, ARRA funds helped Virginia offset state budget shortfalls and save programs and services that might otherwise have been eliminated. The General Assembly allocated $75 million in FY2010 and $201.7 million in FY2011 of Virginia’s share of the State Fiscal Stabilization Fund, part of ARRA, to public institutions to help offset the general fund reductions and to mitigate the need to increase in-state tuition at the colleges and universities over these two years.

While the total price charged to students is a significant factor in access and affordability, just as important for many students is the amount of financial aid available to offset tuition and fee charges. The Commonwealth has embraced an aggressive policy toward financial aid such that students with financial need can mitigate relatively high tuition and fee charges. In 2010-11, for example, Virginia undergraduate students at public institutions received more than $668 million in federal, state, institutional, and private financial aid (excluding loans), most of which was awarded based on financial need. This notion of “net price” – the price a student pays after accounting for financial aid – is a valuable addition to the discussion of access and affordability.

Tuition pricing at Virginia’s colleges and universities and higher education institutions across the country will face additional scrutiny in 2012 as a result of the implementation of federal legislation that requires all higher education institutions to make a calculator available on their institution’s website. The federal calculator, one of several new reporting and disclosure requirements from the federal 2008 Higher Education Opportunity Act (HEOA), aims to provide current and prospective students and their families with the ability to estimate more accurately the true cost of attendance based on their personal financial profile. Institutions were provided with a template of the calculator and given until October 2011 to make their calculator available to the public.

This report focuses on tuition and fees for in-state undergraduates and provides a summary of: 1) board-approved tuition and fee increases for the 2012-13 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. The appendices provide comparisons of changes in tuition and fees for student groups, including in-state undergraduate, out-of-state undergraduate, in-state graduate, out-of-state graduate, in-state first professional, and out-of-state first professional.

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 Price: The total charge to students and parents, excluding student financial aid. This total includes the sum of tuition, all mandatory fees, and room and board.