by James A. Bacon
The tuition model of public Virginia colleges and universities is evolving. In the old model the state made college attendance more affordable to everyone more or less equally by providing financial support to each public institution. In the new model, institutions make attendance affordable for lower-income Virginians by raising tuition and then offsetting it with financial aid.
In the 1990s, the General Assembly set a goal of covering two-thirds the cost of providing an undergraduate, in-state education, and consistently managed to hit the target, Peter Blake, executive director of the State Council for Higher Education in Virginia (SCHEV), told me last week. As recently as the 2001-2002 school year during the Gilmore administration, the state share rose as high as 77%. Since then, that percentage has steadily eroded. This year state support covers only 47%.
Tightening state support for higher ed may be understandable, given the relentless spending pressures the General Assembly faces on all fronts. But there are consequences. Colleges and universities offset the loss of state revenue by raising tuition and fees. Then, because lower-income students find the higher charges unaffordable, university boards raise tuition again to set aside funds for financial aid. Middle-income students lose because they wind up paying more. Even lower-income students lose in the bargain because the financial aid lags the tuition.
The University of Virginia and the College of William & Mary can get away with increasing tuition aggressively: Demand for admittance is so high that people are willing to pay. But less prestigious institutions run into the harsh realities of the marketplace. They can’t raise tuition without losing students and their overhead is resistant to cost cutting. The finances of many institutions is precarious.
“I worry about a financial aid model that relies upon individual institutions,” said Blake. Some institutions will be able to provide aid, others won’t. The results, he said, will be “uneven.”
What’s to be done? It’s easy to say we should increase state support. But higher ed competes with K-12, Medicaid, transportation, prisons, mental health, pensions and other priorities. Every category of spending faces its unique challenges that warrant more state spending. And taxpayers, battered by stagnant incomes, aren’t especially receptive to higher taxes.
In theory another option is to give colleges more independence from state oversight and regulation. That was a deal that UVa, W&M and Virginia Tech struck in exchange for reduced state support several years ago. Freedom from state regulation, it was thought, would give them more flexibility by shortening the decision-making loop.
But Blake doesn’t think that there’s much more to gain from deregulation. “Virginia’s system is so decentralized,” he said. “How much regulatory relief can there be?” Control from Richmond is minimal, he said. Each university is self-governing; it has its own board of visitors. A primary function of SCHEV, he could have added, is to avoid unnecessary duplication and redundancy within the state higher-ed system. As the main instrument of state control, SCHEV acts to restrain spending and costs, not to increase them.
How about administrative bloat? Blake said there are good reasons that administrative costs have increased — usually in response to some perceived societal need such as economic development, community engagement or racial and gender equity. He sees no easy cuts to be made.
Toward the close of our conversation, Blake made an unexpected observation. If judged by growth in enrollment, he said, the most successful institution in Virginia is Liberty University, the institution founded by deceased televangelist Jerry Falwell, Not only is its Lynchburg campus growing, its online learning program is exploding. Liberty, which caters to evangelical Christians, delivers educational services not only to Americans but thousands of students overseas. It is the largest university in Virginia.
The quality of an online Liberty University learning experience probably isn’t the same as that of UVa seminar with a professor interacting with 15 students in the same classroom. But, then, it’s probably a whole lot cheaper. I would conjecture that Liberty, an institution not long-lived enough to develop hoary traditions and an entrenched academic culture has found it easier to adapt to the new technology. One reason college tuition is increasing so rapidly nationally is what’s not happening in higher ed rather than what is. Colleges are not making the productivity gains we have seen in nearly every other sector of the economy. Traditional universities have powerful constituencies — often referred to as “stakeholders” — whose interests must be placated.
If traditional colleges can’t find some solution to their rising costs and rising tuition, they’re in big trouble. Liberty University or institutions like it will eat their lunch.
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