In Placid Session, VCU Board OKs 3.8% Tuition Increase

The Virginia Commonwealth University Board of Visitors approved a 3.8% tuition & fee increase for in-state undergraduate students today, which, along with increases on out-of-state students and dentistry students will yield a 6.4% increase in overall tuition & fees — an increase of $25.7 million.

The increases help offset an $11 million reduction in state support in the 2017-2018 budget and cover other rising costs. The budget provides a $5.1 million increase in financial aid to students, $12 million for a 3% raise for faculty and staff, $8.3 million in “unavoidable” operational and academic costs, and millions more in “highest priority” needs.

“This is a lean budget that addresses unavoidable and operational costs and focuses on our highest priority needs,” said VCU President Michael Rao in a prepared statement. “We are mindful of the cost and burden on students and their families and have increased the amount of university financial aid to students. We are also mindful that we must provide a quality education expected by high-performing students at a major public research university. This is what our students expect and deserve.”

The tuition increase will add about $494 to the annual cost of attendance for a full-time in-state undergraduate student. Smaller increases in dormitories, dining and parking will add even more.

Robert Holsworth, a former dean of the College of Humanities and Sciences, was the only board member to question the tuition increase. Referring to the budget presentation by Karol Kain Gray, vice president of finance, he noted, “There hasn’t been a slide that deals with student debt. We now have the largest student debt of any public university in the state. Other universities have done a better job with affordability.”

VCU is “doing a lot of good things,” Holsworth said, but “I am concerned that we’re … losing our commitment to affordability.”

There followed a train of comments by other board members deploring tuition increases and high student indebtedness but justifying the hikes as necessary to maintain academic quality in the face of state budget cuts and increasing expenses.

The one concrete proposal from that exchange came from G. Richard Wagoner Jr., former CEO of General Motors. Instead of budgeting in one-year cycles, he suggested, perhaps VCU could adopt a longer perspective and ask what kind of tuition policy it wants to have. “What’s a desirable policy?” he asked. Zero increases in tuition? Tuition increases that keep place with inflation? Tuition increases that equal inflation plus two percent?

“I could not agree with you more,” said Rector John A. Luke, Jr., former CEO of MeadWestvaco, although he noted that over the long term the increase in tuition “almost mirrors exactly” cuts in state support. He said VCU needs to find a way to avoid being “held hostage” to the state’s budgetary needs.

William M. Ginther,  a retired banking executive, suggested that VCU needs a “business strategic plan” to accompany its budget plan to develop new revenue options and identify cost-cutting opportunities.

No action was taken on any of these ideas. But the board did vote to adopt the budget and tuition increases. Holsworth voted no.

Bacon’s bottom line: I have attempted to fairly describe the meeting highlights above. Now for some analysis. The board meeting saw little substantive discussion about the budget. Other than Holsworth, not one board member pushed back on the administration’s presentation of the budget or its justification for raising fees. I did not attend the earlier finance committee hearings in which the budget was examined in greater detail, but no one alluded to any disagreements in those meetings either.

VCU’s “unavoidable costs.” Click the thumbnail for a legible image.

The administration almost pre-determined the outcome by the way it framed the budget presentation. The FY 2017 budget was taken as a baseline — nothing was questioned — and new costs and programs were layered on top. Click on the thumbnail to the left to see the list of $8.3 million in “unavoidable” costs: everything from shuttle service and library journals to faculty promotions to operations & maintenance on new buildings.

Highest-priority needs. Click for legible image.

To those costs VCU added “highest priority needs” such as $1.8 million in merit-based financial aid, $3 million in need-based financial aid, and implementing a 3% increase in salary and compensation for faculty and staff. These and other priorities amounted to $19.3 million.

VCU picked a tuition increase — 3.8% — that closed most of the gap. A $3.8 million budget shortfall remains, which will be addressed “at the unit level across the university,” according to the press release.

VCU administrators provided data showing how state funding is chintzy compared to that of other states — as, in fact it is. Virginia’s $4,930 per student ranks 44th among the states, far less than the $6,966 national average.

But in a nearly $1.2 billion budget, there are many ways that VCU did not explore to make up the loss of $8 million in state support. For example, the administration provided no analysis of what private businesses would call product line profitability. VCU supports a wide variety of schools and departments — academic product lines — but the public, and board members, have no way of telling whether the courses are fully subscribed or ill attended. Businesses sell or shut down unprofitable product lines. VCU’s approach to the budget effectively treats every budget and department as sacrosanct.

VCU also is spending millions of dollars constructing new buildings, but there was no analysis of campus-wide space needs. Are classrooms and lecture halls fully utilized? Many private-sector businesses are deploying “hoteling” and other techniques to reduce the square footage of office space per employee. Is VCU doing anything to reduce the square footage needs of faculty, staff and students?

The board of trustees heard a presentation today describing a sweeping redesign of the university’s human resources system. The goal is to make VCU a “great place to work” by keeping the things people like about being a state employee (sweet pension and medical benefits) and offering private-sector goodies like merit pay, all within a budget-neutral framework. Most commendable. But the administration missed an opportunity to shed light on VCU’s workforce productivity.

The board did briefly lay eyes upon an interesting chart:

This shows how VCU relies more heavily upon non-tenured instructors and adjunct faculty than Virginia’s other research universities. These non-tenured employees are cheaper to employ than Ph.D. professors but they don’t conduct research and are considered less prestigious in “best university” rankings. The paucity of tenured professors is widely thought to reflect poorly on the quality of the learning experience — even though tenure-track faculty teach less.

Is that conventional wisdom accurate? Many universities have faculty caste systems in which highly paid full professors carry light course loads and teach few students while lower-paid instructors carry much of the teaching burden. Clearly, VCU runs much leaner than its Virginia peers. The administration missed an opportunity to cast itself in a favorable light — and, perhaps, to find ways to squeeze even more productivity from its faculty.

Perhaps the most important issue not discussed is one I raised in a recent post, “VCU Ponders Risky 5.3% Tuition Hike.” VCU offers a dubious value proposition. It charges the second highest tuition & fees among public Virginia institutions, but its students have among the lowest family incomes. Even though performance is improving, fewer than 60 percent of underrepresented minorities graduate within six years, often due to an inability to pay tuition, fees, books, room, board and miscellaneous expenses. As Holsworth pointed out, 65% of students carry debt, and the average indebtedness (presumably for graduates) exceeds $30,000. VCU is expensive for a public university and, despite modest increases in financial aid, students are hard pressed to afford it. At what point will applicants cry, “No mas!” and enrollment numbers start declining? No one on VCU’s board raised even raised the possibility. There is no indication in the materials presented to the board that the administration has given the matter any thought.

VCU needs board members willing to make waves and ask uncomfortable questions. I have yet to attend board meetings at other universities, but I’ll lay odds that the same is true elsewhere.

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16 responses to “In Placid Session, VCU Board OKs 3.8% Tuition Increase

  1. They will wait until the students are fewer to the point it drives them away and then wring their hands.

  2. re: drive them away..

    well they’re smarter than that.. they’ll monitor the numbers and if a trend starts..they’ll react.. and only to the point they arrest the trend..then they’ll go back to increases again and monitor etc.. not unlike the cable TV folks!

  3. and from Fredericksburg; ” University of Mary Washington raises tuition 4.5 percent”

    The school’s board of visitors voted unanimously to increase tuition 4.5 percent and fees 5.5 percent at its Friday meeting. With the already approved room and board rate increase of 2.8 percent, the total cost to attend UMW next academic year is increasing 3.9 percent, or $836 per in-state student.

    But before the vote, board member Edd Houck regaled the board with two parables about the real-world implications of their actions.

    He called the system that relies on tuition-based payers “atrocious, particularly for hard working middle-class people.”

    Houck said one year at graduation, he saw a man sitting on the curb in a new suit and recognized him as a business owner from Spotsylvania County whose daughter was graduating. The man told him that in order for his daughter to finish her education, he had to sell a piece of equipment from his business because they were determined she wouldn’t go into debt to get a diploma.

    The second was a woman he knew who took on extra hours at a hospital to pay for her daughter’s college but in doing so, lost out on time with her younger child, who was in middle school.

    “I don’t want us as a board to ever forget there are people and faces behind each and every thing that we do,” he said.

    Nevertheless, Houck supported the budget for “all the good work it does,” raising salaries and providing financial aid.

    UMW President Troy Paino said, “While we have not solved all fiscal problems … we did achieve immediate goals and doing so at a time when the state is not increasing funding.”

    I continue to point out that there are many options for obtaining a higher education these days and that the traditional 4yr while the gold standard benchmark for some – may be becoming one that is not going to be affordable for the middle class in a changing 21st century world and in no small part because of every increasing health care costs that eat up whatever increase in income the middle class does get.

    4yr on campus college may well be an anachronism unique to the US in the 21st century global economy of automation, robots, AI.. and the US inability to do what all other countries have successfully done with health care costs.

    College in most other countries is also a very different critter without sports programs and if residential a smaller segment than off campus living.

    In effect, they’ve chosen taxes to pay for health care for all instead of subsidizing college so kids can live on campus and attend.

    It may well be time to offer “free” 2yr community college to all kids in Va and no state aid to 4 yr – let them figure out how to operate 100% on non-state aid . Let the state decide on vouchers as well as the amount of loan available for kids on a means-tested basis contingent on academic performance.

    See now… we have the situation where Jim wonders aloud if the tuition increase that makes college less affordable is driven by increasing costs so that lower income kids can be subsidized.

    so now we seem to be arguing that if the state is going to subsidize that it not go for the lower income if it adversely affects the middle income students and makes it less affordable for them…

    When we find ourselves in a situation where are are arguing against assistance to lower income kids if it is perceived to make it less affordable for kids of better economic means.. we’re gone to a bad place in my view.

  4. Dear Bacon’s Rebellion — thank you for choosing the gloomiest Saturday morning in quite a while to erode whatever good humor I might have waked with today. This too will pass. Beats reading the paper this week, anyway.

    Of course, HE tuition is a difficult topic that has touched all of us — though nothing compares with the way it touches anyone with college-age children.

  5. Federal employees are scheduled to receive a 1.9% raise in 2018. How many private sector employees are receiving a 3% raise? What are the turnover rates among various types of VCU employees?

    • In fairness to VCU, I think this is the first year their employees have received a raise in a few years — same situation as for state employees.

      • Feds went 3 years without a raise.

        • re: “raises”

          I would posit that a great number of people who work don’t even know what a “raise” is… they make what they make and are happy to have a job.

          I would further posit that as the economy evolves and more and more people work at more and more jobs that do not pay “raises” – including the “gig” economy that the concept of “raise” is going to change.

          The big change that is coming is called AI – artificial intelligence and it’s very real and will start to replace – “skilled” white collar workers .. and will fundamentally change the way that government hires and employs it’s workforce… fields like legal and medical, engineering are also going to be “automated”..

          And the challenge people will be what kind of education will get them an actual job that won’t be automated.. and the challenge for govt will be what to do about unemployment and masses of disaffected who will vote out of office anyone who does not “fix” the problem. Of course the real threat will be who they do vote into office and on what promises made.

  6. I have sympathy for the Board members of these universities. These institutions are so complex and deeply embedded within a overwhelming matrix of powerful special interests (both external and internal) as well as governmental regulatory controls, and counter productive habits and practices built up over many decades, that likely all but a very exceptional board member would have any chance to do anything of significance other than to simply agree to go along on what is surely by now a plainly unsustainable course.

  7. meanwhile back at the ranch – fundamental – disruptive change is starting to ripple throughout the entire realm of “education” .. right now k-12 but inevitably higher ed and anyone who think Massive Open Online Courses MOOC is not real.. needs to rethink in terms of the dotcom “bust” that bounced back with a vengeance .

    NYT article entitled: ” How Google Took Over the Classroom”


    ” Chicago Public Schools, the third-largest school district in the United States, with about 381,000 students, is at the forefront of a profound shift in American education: the Googlification of the classroom.”

    ” Today, more than half the nation’s primary- and secondary-school students — more than 30 million children — use Google education apps like Gmail and Docs, the company said. And Chromebooks, Google-powered laptops that initially struggled to find a purpose, are now a powerhouse in America’s schools. Today they account for more than half the mobile devices shipped to schools.”

    “Between the fall of 2012 and now, Google went from an interesting possibility to the dominant way that schools around the country” teach students to find information, create documents and turn them in, said Hal Friedlander, former chief information officer for the New York City Department of Education, the nation’s largest school district. “Google established itself as a fact in schools.”

    and here’s the transformation already underway – that many if not most are unaware of:

    ” In doing so, Google is helping to drive a philosophical change in public education — prioritizing training children in skills like teamwork and problem-solving while de-emphasizing the teaching of traditional academic knowledge, like math formulas. It puts Google, and the tech economy, at the center of one of the great debates that has raged in American education for more than a century: whether the purpose of public schools is to turn out knowledgeable citizens or skilled workers.”

    think about the above narrative in terms of public schools versus other types of schools, charter, choice, voucher.. where “learning” is done less and less the traditional way of a classroom teacher “instructing” .. academic content.

    think of a child “learning” this way – getting to the point where they are headed to college – and what kind of “learning” he/she will do in College.

    • Google, like Amazon and Apple, are monopolies that need to be broken up. They simply have too much economic power.

      Having said this, teaching collaboration skills is good. Teaching problem-solving skills is good. But abandoning the fundamentals of basic education is not good. Harken back to the days when the teacher pounded (sometimes literally) her students to show their work on math homework and tests. Or the unpleasant Thursday nights when my dad went through the week’s spelling words more times than I wanted to make sure I’d pass the “Final Test.”

      Students need to understand the basic principles and truths (or competing theorems of the classes they take) or we get collaboration and problem solving based on what feels good or is in fashion.

  8. The idea that schools should be teaching “the facts” and other basic educational skills or team-working and critical thinking is a terrible fallacy. An educated person needs both. As technology and society get increasingly complex, people need all of the above.

  9. I did not ‘get’ the .. binary choice.. at all.. I actually see the change as a way to draw kids into the content. .. and at the same time , measure their performance and competency – and configure the lessons to focus on their weaknesses – AND their strengths.. much better on a per kid basis than any teacher could possible do for a room full of kids.

    As always – no matter the method – or whether it be public or private, charter, choice or voucher – there needs to be performance benchmarks …

    but the one-size-fits-all content from the teacher to all the kids being the only path is what fails.

    remember this is the guy who keeps reminding you guys just how terrible our schools are in comparison with their global competitors.. and unlike some of you I do NOT think that there is anything magical about a no-standards voucher or choice version of the current standardized public school regime.

    this is not only going t change k-12 – it’s going to change the way we do Higher Ed also.

  10. So a question – somewhat hypothetical… but only a little.

    If a kid could take a chromebook and get access to WiFI – and successfully “learn” and be tested to prove he/she did learn… say a homeschool ……… or a charter/choice/voucher where the teacher/instructor is as much a facilitator as they are a content “expert” … then what’s the argument against that?

    I keep asking.. what is it about a physical classroom and a human teacher that is unique to learning that cannot be accomplished with other methods and means?

    Isn’t this a way to have the content expert “in the box” .. such that a kid in a poor neighborhood could learn – away from “disruptions” … or a kid in SW Va “learn” for more than they might at the local school that has maybe not the best teachers … due to salary and geographic appeal?

    I note that our local library has just set up a rural satellite site – complete with chromebooks and broadband internet WI FI – and as soon as they were up and operational – they had strong demand for the chromebooks..

    so tell me again ..what we need a teacher in a physical classroom?

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