RD204 - 2014-15 Tuition and Fees at Virginia’s State-Supported Colleges and Universities

Executive Summary:
Analysis of tuition and fees at public colleges and universities in Virginia must include a discussion of the funding received from the General Assembly. The period covered by this Report represents a particularly complicated scenario that impacted not just higher education but all entities that receive general fund dollars.

The 2014 Virginia legislative session began in January but the 60-day “long” session, as it is referred to, ran longer than scheduled due to a budget impasse. The Governor then called a special session to deal with the impasse. By June it became clear that the state was experiencing a serious revenue shortfall that was estimated at $350 million in FY2014 and nearly $1.6 billion over the next biennium. This realization, along with the hope of tapping the Revenue Stabilization Fund (which cannot be accessed unless there is a General Assembly-approved budget in place) ultimately ended the budget stalemate.

On June 11, the General Assembly budget leaders reached an agreement to manage the projected shortfall by identifying more than $900 million in spending cuts and tapping the Revenue Stabilization Fund, or Rainy Day Fund as it is called, to address the rest of the estimated shortfall. On June 12, lawmakers passed the 2014-16 biennial budget, ending the three-month budget stalemate and thus averting a potential government shutdown.

By statute, each institution’s governing board of visitors has the authority to set tuition and fees. Typically, this process takes place between March and May each spring—after the General Assembly acts to produce a budget for the coming year and in time for students and parents to plan for any necessary increases in tuition and fees. However, because of the legislative budget impasse this year, the boards were forced to set student charges for the 2014-15 academic year without knowing the level of state support that would ultimately be made available to them through the Commonwealth’s cost-sharing policy. The Governor, House, and Senate initially proposed approximately $70-$100 million in additional general fund support to higher education for the next fiscal year. However, due to the projected budget shortfall, higher education institutions will remain funded at close to the FY2014 levels in FY2015. If state revenues shrink further, additional budget reductions may be needed. Next year, tuition and all mandatory fees for in-state undergraduate students will increase by 5.7%. These charges increased by 4.3% in 2013-14, and 4.1% in 2012-13 -- the lowest annual increase in a decade.

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 2014-15 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 as follows:

1. Tuition and Mandatory E&G Fees: Mandatory student charges used to support instruction and education-related 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.