U.Va. Tuition Increase of 3.7 Percent for In-State Students Is Smallest in 10 Years

April 13, 2012 — The University of Virginia's Board of Visitors today approved the smallest increase in a decade for in-state tuition and mandatory fees: 3.7 percent.

After 10 years of increases that saw a high of 19 percent in 2004, members of the University's governing board said they wanted to be sensitive to both the economic realities facing families and the political realities facing higher education, while at the same time recommitting the University to attracting and retaining a top-notch and diverse faculty and student body.

In this environment, the board voted to increase in-state undergraduate tuition and fees for the 2012-13 academic year by 3.7 percent – or $430 annually – to $12,006.

Out-of-state students will see an increase of 4 percent – or $1,448 annually – to $38,018.

The total cost of education, which includes, tuition and fees, first-year orientation fee, room and board, books, travel and miscellaneous expenses, is projected to be approximately $25,400, an overall increase of 4 percent, for an in-state student. At $51,600, the cost of a University education for an out-of-state student continues to be more than double that for an in-state student.

At the same time, investment in AccessUVa, the University's financial aid program, will increase in 2012-13 to keep pace with the proposed increase in tuition. President Teresa A. Sullivan said that she expects the University to continue to meet the full need of qualifying students. lin

The University anticipates that roughly 34 percent of in-state students and 31 percent of out-of-state students will qualify for some financial aid. Grants will range from a few hundred dollars to the full cost of education. The average net price for an in-state student on aid to attend the University after deducting grant aid is projected to be $13,221; the average net price for an out-of-state student on aid is projected to be $27,817.

AccessUVa's budget is expected to exceed $95.4 million next year.

"In setting tuition each year, we have worked hard to remain mindful of the need to keep the cost of a University education affordable. For many years, we have been looked to as a leader in quality and value," Sullivan said. "With the changing economic landscape, including increased pressure on families and a 20-year trend of declining government investment in higher education, that is becoming more difficult with each year."

Sullivan credits sound fiscal management for allowing the University to make moderate increases this year, but believes that, long term, the institution may be at risk of sacrificing some of the things for which it is best known, including stellar faculty and top-ranked programs.

The price of undergraduate meal plans will increase by an average of 3.7 percent, or up to $160 annually, depending on the plan. The housing double-room rate will increase by an average of 4.5 percent, or $223 per academic year.

Total resources per in-state student have declined over the past two decades while more unrestricted institutional resources have been devoted to financial aid. Since 2000-01, state funding per in-state student has fallen from $15,247 to a projected $8,310 in the 2012-13 academic year. "We cannot ignore the economic realities facing families – and the state," Sullivan said prior to the board meeting.

The total cost to the state and its citizens of educating an in-state U.Va. student is lower on an inflation-adjusted basis today than it was nearly 15 years ago, she said. And as the University has devoted more of its own resources to financial aid, state resources available to educate in-state students have continued to decline. In fact, the University has 10 percent less in resources from the state on an inflation-adjusted basis today than it had 18 years ago.

By contrast, the University of North Carolina at Chapel Hill received $22,105 per in-state student in 2011-12, and the University of Michigan received $13,024.

While the University's general fund appropriation from the state was cut by more than $50 million over four consecutive years beginning in 2007, this year the proposed state budget – which has not yet been approved – includes $3.5 million in new revenue to support the Academic Division's core operations.

Michael Strine, executive vice president and chief operating officer, said the University at the same time would face more than $7 million in added costs. "These are due to changes in funding requirements for the Virginia Retirement System – $1.3 million; defunding of the Eminent Scholars program – $800,000; and the University's required share of the 3 percent merit-based bonus included in the proposed state budget, which will cost $5.1 million," he explained.

In framing the context in which tuition increases were determined this year, Strine pointed to a number of influences that impact tuition and drive increases. They include: the trend of shifting cost and responsibility for financing higher education from the taxpayer base to the individual student and family; declining state support per in-state student; increasing state mandates; attracting top faculty and students in a competitive environment; and investing more in financial aid to reduce the net cost for students with need.

In order to mitigate tuition increases, the University has taken a number of steps over the past two decades, Strine said. He noted, however, that tuition remains a primary source of institutional funding and has been relied on to make up a portion of the significant declines in state support.

"We have limited our salary adjustments, managed our workforce through attrition, improved administrative efficiencies and maximized other resources, particularly private fundraising, as a means to support program innovation and faculty," he said.

The tuition presentation to the board also included a discussion on the implications of federally mandated net-price calculators, which are required to appear on all institutional websites. The calculator figures the "net," or discounted cost to families after financial aid is applied.

"Net price calculators will change the way families look at affordability of colleges and universities," Strine said. "They will have an impact on the University's ability to compete, in particular, for the most qualified students whose families are considered middle-income."

Strine noted that public institutions, including the University, would be hard-pressed to compete with peer private colleges and universities for top students who have financial need. "Private schools have greater pricing flexibility that results in more tuition revenue. This is one of the major advantages that allow them to have more substantial aid programs. And it translates to very reasonable net prices that are difficult for public institutions to compete with."

For example, a Virginia in-state student who qualifies for financial aid might find the net price at such places as Duke University and Yale University lower than those at public universities in his or her home state.

Sullivan and Strine agreed that public colleges and universities will be involved in a broader national debate as the trends in declining state funding and increasing financial need continue to drive the conversation.

McIntire Differential; New Lab Fees in Nursing and Engineering

The board also approved the continuation of the McIntire School of Commerce's tuition differential plan. In the upcoming academic year, third- and fourth-year students in the school will pay a $4,000 tuition differential, an increase from the $3,000 that was put into place for the current year. The school hopes to bring the differential to $5,000 for the 2013-14 academic year.

Also approved were two new fees related to the increased cost of labs and new technology for students in the School of Nursing and the School of Engineering and Applied Science.

The Nursing School's clinical laboratory fee of $60 per credit hour will be charged on all undergraduate and graduate nursing courses with a clinical component. The fee will generate approximately $300,000, of which two-thirds will support the school's newly renovated Clinical Simulation Learning Center. The impact on students will be rolled out over over four years until it reaches $1,440 annually.

The Engineering School's laboratory fee of $32 per credit hour will be charged on all undergraduate engineering courses. It is expected to generate close to $1.8 million, of which two-thirds will support technology updates in the school's teaching laboratories. The annual impact on students will be $750 a year.

The College at Wise

The board approved an increase of 5 percent in tuition and all required fees for in-state students at the College at Wise. This translates to $386 annually and will bring tuition to $8,107. Out-of-state students will see a 5.3 percent increase that will add $1,139 a year for a cost of $22,475.

The total cost of education at Wise, including tuition and fees and room and board, will be $17,547 for in-state students and $31,915 for out-of-state students.