Bacon's Rebellion

No Paino, No Gaino

Troy Paino

The University of Mary Washington had endured ten tough years when it hired Troy Paino in 2016. The new president is working to restore its competitive stature among public Virginia colleges.

Between its founding in 1908 and 2006 almost a century later, the University of Mary Washington (UMW) had only six university presidents. In the decade following, it suffered extraordinary churn at the top. One president had a drinking problem, one had a falling out with the board, and one, a senior administrator, stepped in twice, first as an interim president and then as a permanent one until he retired. The turnover, which coincided with the 2007-2008 recession, did not work out well for the Fredericksburg-based liberal arts college.

While more students applied to UMW in the 2016-17 academic year than ever before, the university also accepted a higher percentage of applicants — a sign of waning selectivity — to offset the declining percentage of those who, once accepted, actually enrolled. Out-of-state enrollment plummeted to a fifth of the 2000 peak, costing the university almost $9 million a year in lucrative out-of-state tuition payments. Also discouraging: The graduation rate slipped three percentage points over the decade, even while it improved at most other state public universities. All these numbers trended negative, even as UMW borrowed heavily to renovate dormitories and install amenities needed to stay competitive with peer institutions such as James Madison University (JMU) and Christopher Newport University (CNU).

That was the situation facing Troy Paino when he gave up his job as president of Truman State University, a public, liberal arts institution in Missouri, to take the top spot at UMW. Sixteen months after taking the helm, early indicators suggest that the university has turned the corner. Selectivity metrics have ticked back up, and so has out-of-state enrollment. Perhaps most important, UMW has honed its niche among public Virginia institutions as the university that puts the “liberal” in liberal arts, cultivating a “culture of acceptance” and a commitment to service.

Paino invited me to his office to discuss a blog post I wrote last month examining the college admissions data. I had speculated that the low yield rate — the ratio of students accepted to the university who chose to enroll — was evidence that the university was running into price resistance from students and parents. To the contrary, Paino says, the tuition hikes of the previous decade had been moderate, and UMW, far from scraping against the upper limits of what it can charge in tuition, has considerable leeway to charge more should it wish — which it doesn’t. But that doesn’t mean the university doesn’t face big challenges.

“We’re in a very competitive market,” Paino says. When aspiring students apply to Mary Washington, they most frequently cross-apply to the University of Virginia, George Mason University, JMU, and CNU. He concedes that many regard UMW as a fallback school — they plan to attend only if they don’t get into the institution they really want. That’s why so many of those who get accepted don’t enroll. Paino wants to turn that around. “We want to be the institution where they want to go.”

Among its advantages, Mary Washington is a liberal arts institution, not a research university. It offers smaller classes taught by tenured faculty, not graduate-student teaching assistants. The university is “ahead of the pack,” says Paino, in helping students gain fluency in digital technologies. The Hurley Convergence Center, which stays open 24-7, is a place where students can do everything from record videos in a production studio and edit music in the multimedia lab to host events at a digital auditorium and display art in the Convergence Gallery.

Mary Washington also has a unique “culture of acceptance,” says Paino. By his estimates, UMW has twice the percentage of students with physical, learning and other types of disabilities as other universities. Students have a commitment to service, civic engagement and justice. Graduates go into the Peace Corps at one of the highest rates in the country. 

The balancing act in higher education is to invest in buildings, amenities, and student enrichment while remaining affordable. Keeping a lid on costs can be tough when college-bound students are heavily influenced by the quality of amenities such as food service, dormitory rooms, student commons and athletic facilities. UMW ran up its debt load earlier in the decade to upgrade its early-20th century structures as a “direct response” to the competitive challenge of Christopher Newport, which had built a handsome campus of new buildings.

Ironically, surveys indicate that students living in the old dormitories with the fewest creature comforts have the highest levels of satisfaction based on the sense of community they experience. But prospective students don’t know that. “When students come to visit, they go for the ‘wow’ experience,” Paino says. “It has become a bit of an arms race.”

The Mary Washington board has instituted three policies to avoid excess accumulation of debt. First, the university can spend no more than 10% of its operating budget on debt service. The debt-to-revenue ratio did increase from 4% in 2008-09 to 8% in 2015-16 to pay for upgrades to two residence halls, an athletic center, and the student union, but it eased somewhat in 2016-17. Second, debt must be less than 50% of the value of total university assets. And third, debt cannot exceed a $200 million cap.

Paino also is aiming to build up cash reserves to a level equivalent to 10% of revenues. Reserves have three components: a rainy day fund, a revenue-stabilization fund, and a fund for strategic investments. To meet those goals Mary Washington needs $12 million. When Paino arrived, cash reserves were $5.7 million. In the past year, he has built them up to $8.5 million.

The General Assembly is discussing a law that would allow public universities to take unexpended surpluses at the fiscal year end and apply them toward the institutions’ own revenue stabilization fund. Paino isn’t waiting for legislative action. “We have to be self sufficient. We can’t wait for the legislature to stabilize the funding for us.”

One key to getting Mary Washington back on the right track is bolstering its appeal to out-of-state students. In the 2016-17 school year, the university charged in-state students tuition, fees, room, and board of $21,508, while it charged out-of-state students $36,098. If the university could get back to its peak of 20% out-of-state enrollments, a gain of roughly 400 students, it would net an additional $9 million a year — a 7% boost to its budget.

A major challenge in an era of ever-escalating enrollments is accommodating the surge in lower-income Pell grant recipients. Paino characterizes the student body as predominantly middle class, which it is: the 18.5% level of Pell recipients is significantly lower than the state average. But over the past decade the number of Pell students increased at twice the rate of Virginia’s public state schools overall. Low-income students require extra student aid over and above what the federal government provides. If they don’t get it, they are more likely to drop out for financial reasons. Over the past decade, UMW has boosted institutional aid by $3.1 million, or 164%, without benefit of a large endowment. Despite the increase in financial support, the drop-out rate increased slightly, even as Virginia’s other public institutions were able to bring the rate down, although, Paino points out, UMW did a better job this year in retaining members of the freshman class — a positive sign for the future.

Despite the difficulties, Paino remains upbeat. A big believer in metrics, he distributes a dashboard of institutional effectiveness to board members. UMW’s acceptance rate is slightly down (meaning UMA is slightly more selective), and the percentage of accepted students who enrolled was slightly higher — equivalent to James Madison. The SAT scores of entering freshmen are higher, averaging 1173, and so are high school GPAs. Compared to its competitors, its 71% six-year graduation rate is “pretty darn good” and its student loan default rate is “pretty impressive.”

It takes time to change direction, and Paino credits his predecessors for building positive momentum. Now that he has been at the university long enough to get to know it well, he says, he thinks UMW is heading “in a very positive direction.”

If there’s one thing Paino would ask from the state — aside from more money, of course — it’s a tweak to Mary Washington’s governance system. Visitors typically serve for four years. The issues relating to running a university are so complex and so different, he says, it takes two or three years before most board members know enough to contribute fully.”

“Every year, we have to educate these new board members,” he says. “I would argue for a little longer term.”

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