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Educational Workshop
Rector Clement opened the meeting and welcomed the participants. He said the University has held similar meetings over the past few years to solicit input on tuition and fees decisions. One of the most important issues the Board of Visitors considers every year is setting tuition. He introduced the other members of the Board and the workshop speakers Ms. Davis, Ms. Magill, and Ms. Henry.
Mr. Clement said setting tuition is one of the most important duties of the Board of Visitors. It is the last lever the board wishes to pull to fund the university’s operations.
He gave some background on the process for this year, explaining the role of the Finance Subcommittee on Tuition. Last summer, the subcommittee studied undergraduate tuition policy, including the tuition-setting process and timing of decisions. The subcommittee met throughout the summer and made recommendations to the Board in September on actions to take to improve the transparency and predictability of tuition setting. Two key elements of their recommendations: 1) tuition should be set in December; and 2) tuition should be set on a two-year basis. Reasons include that a December decision aligns with admissions decisions dates, streamlines student financial services internal processes and reduces the number of times a financial aid application has to be reviewed, improves planning processes for schools and units, and allows for earlier and more frequent engagement with diverse stakeholders and leadership. Most importantly, setting tuition for two years gives families crucial financial information early so they can plan for two years instead of one.
Mr. Clement said the proposal that will go to the Board this month includes tuition for 2022-23 and 2023-24. The proposal will assume that the General Assembly will provide the same amount of general funds as in the past. If, during the upcoming session, the Governor and the General Assembly increase state support significantly, the Board could decrease tuition rates in the spring.
He said the tuition subcommittee also recommended improved transparency by communicating changes in tuition to students and their families with a focus on timely, accurate information about net price and total cost of attendance, the overall picture of the operating budget realities of what tuition increases will fund, and the value proposition of a UVA education.
He also addressed recent comments about the endowment returns and why the University doesn’t freeze tuition and use the returns to finance the university. That may seem logical from a macro view, but there are reasons why this would not be prudent or fiscally responsible for the long term because most endowment accounts are restricted by donors for certain purposes and cannot be diverted to other purposes. One restriction for endowment funds is scholarships, and endowment funds are one of the primary ways UVA can provide free tuition for in-state families with less than $80,000 in family income, and free tuition, room, and board for in-state families with less than $30,000 of family income. UVA caps loans for low-income Virginians to $4,000 and for all other Virginians with need, loans are capped at $18,000. For non-Virginians with need, loans are capped at $28,000, and this is for all four years.
Another group of restricted funds in the endowment is for professorships, which allow the University to engage some of the best and brightest faculty in the nation. Without these funds, UVA would not be able to compete with many peers on compensation.
In conclusion, he said the endowment provides important funding for many areas that are not supported through tuition and state support.
Ms. Magill spoke about the value proposition of a UVA education. She explained the goals in the 2030 Plan, and tuition is one way of accomplishing the goals. UVA attracts talented students and faculty and has a 96.8% one-year retention rate. UVA is one of the very few public universities that covers 100% of financial need for its undergraduate students and prioritizes affordability, accessibility, and maintaining high quality. Access UVA statistics show 36% of undergraduate students have need, and 100% of need is met through grants and loans.
Increased tuition has not kept pace with declining state support, and Ms. Magill noted that in-state tuition now accounts for more than state support per in-state student. Over 30 years, the combined investment from students and the state is less than 1990-91 in inflation adjusted dollars. There is a gap of $4,141 per in-state student in 2021-2022 that must be covered by sources other than tuition, fees, and state support. Differential tuition, increases in out-of-state tuition, endowment, and philanthropy, supply these funds.
Ms. Davis explained, using a dollar bill graph, how tuition and state funds are spent to educate students. She also explained the role of inflation, represented in the Higher Education Price Index (HEPI). If we followed the Board policy of HEPI+1% every year since 2016, we would have raised $49M more. The gap is about $4,207 per in-state student.
Ms. Davis said the administration also focuses on cutting costs. She showed a slide on cost cutting and process improvements. She then moved on to uses of the endowment, which provides long-term sustainability for the University as well as a protection against inflation. Specifically, it is used to supplement base tuition and appropriations including funding strategic priorities in the 2030 Plan, recruiting world class faculty and researchers, funding the best undergraduate financial aid program among publics, and matching state contributions for capital projects such as the Health and Wellness Center, Data Science, the Democracy Institute, and many others. She showed a dollar bill divided by how endowment dollars are used.
Ms. Davis said the operating challenges and opportunities for FY 2023 include inflation, a 3% merit increase for all faculty and staff, minimum wage increases and increased pay for front-line workers, increasing utilities costs, and library collections costs. The tuition increases have been modest in the past few years, with no increase this year. An increase is needed next year, assuming the state appropriation will stay at the same level.
Chancellor Donna Henry gave an overview of the College at Wise. The value proposition revolves around service to students in the Commonwealth and in the Appalachian region. The College at Wise serves students from lower socioeconomic areas who might not have access to affordable higher education. The College at Wise was awarded a “most bang for the buck” designation from
Washington Monthly
magazine, and ranked nationally on the U.S. News & World Report Social Mobility Index. The College at Wise’s software engineering program is recognized nationally for its accessibility to students.
Chancellor Henry explained the goals and values of the College at Wise. They include a public liberal arts identity, affordability and accessibility, a commitment to the individual, and engagement with the community. The new strategic plan was just approved which reimagines the core curriculum, provides for guided pathways and a student success collaborative, and focuses on experiential learning and a high impact hub. She mentioned the Center for Educational Excellence and Innovation for faculty and staff development, and the development of a peer education network of students helping other students. Two College at Wise students, Telena Turner ’20 and Robert Powers ’19, were mentioned regarding their experiences.
Ms. Henry said the tuition philosophy is to look to tuition as a last resort with a focus on affordability and accessibility. They have also contained costs through a hiring freeze, an early retirement program, restructured auxiliary debt, a college-wide zero-based budget exercise, and other reductions.
Ms. Henry said the proposal would increase in-state undergraduate tuition 3.0% per year for the next two years, institute mandatory fees of $161 in-state and $180 out-of -state in FY2023 and a slight increase in FY 2024, and 2% and 4% room and board increases per year respectively.
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