U-Va. financial plan calls for tuition and fee increases


Teresa Sullivan, president of the University of Virginia, poses for a portrait in front of a statue of Thomas Jefferson on campus in this 2012 file photo. (Norm Shafer/THE WASHINGTON POST)
March 26, 2013

University of Virginia President Teresa Sullivan and her staff have developed a four-year financial plan that would increase tuition and invest in faculty, technology and new programs as the public flagship confronts economic challenges and relies less on state funding.

The plan, which is still a draft, is among the U-Va. administration’s first major proposals since last summer, when leaders of the Board of Visitors asked Sullivan to step down because they wanted a bold, visionary leader who could more quickly enact change. After Sullivan was reinstated, she and her staff threw themselves into developing a strategic plan for the university, which is due at the end of summer. In the meantime, they drafted this financial plan.

The proposal calls for charging more for a U-Va. undergraduate education, while focusing the school’s fundraising efforts on faculty salaries, financial aid and renovation of Thomas Jefferson’s aging “academical village.” In coming years, students could expect annual tuition increases of about 3 to 4 percent, plus an additional fee of $2,000 for their third and fourth years that covers the higher costs of “smaller class sizes, rigorous capstone courses, global learning opportunities, career placement and internships, and increased research opportunities.”

University leaders plan to invest in the “significantly underfunded” library, modernize the school’s technology to support online learning and set aside millions in a “strategic investment fund” that could be used to recruit or retain star faculty, finance partnerships with private companies or support new programs or collaborations.

“You have got to experiment,” said U-Va. Provost John Simon, who helped develop the plan along with the university’s chief operating officer, Patrick Hogan. “I would hate to see the financial strain decrease the entrepreneurial aspect of doing experiments in education on higher-education cam­puses, especially at this point in history. . . . If you stagnate, you will lose.”

While little is known publicly about the “philosophical difference of opinion” that prompted last summer’s presidential ouster, the dispute between Sullivan and Board of Visitors Rector Helen Dragas has come to symbolize the tensions that have arisen at public universities nationwide. Many struggle as state funding flattens and there is increasing pressure to prepare students for a tight job market.

Dragas said in an interview this month that she is opposed to further increasing tuition. The sticker price for in-state tuition has increased from about $6,150 in 2004 to $12,200 this year. She also noted that the economy has left many Virginia families with stagnant or declining incomes, meaning tuition increases could make the flagship state school inaccessible.

“Accountability for how taxpayer and student money is spent is obviously not a popularity contest,” Dragas said.

The board’s finance committee is expected to have a “very robust discussion” of the plan in Richmond next week, according to Victoria Harker, a board member and chairman of the committee. It is not just a discussion about the university’s upcoming ­expenses, she said, but also about setting priorities within those expenses.

U-Va. has long compiled annual budgets and long-term strategic plans, but this “medium-term” version is rare in higher education, Harker said. The plan provides a starting point for discussions about long-term goals, she said, while also laying out how U-Va. can quickly adjust its ­sources of revenue to accommodate unexpected ­changes in the economy, state appropriations, research funding or other factors.

The plan also is a primer for board members and others on the intricacies and challenges of operating a major public university, and it shows that the financial health of U-Va. is not as dire as some characterized it during last summer’s crisis.

Across the country, a growing number of governors and politically appointed governing boards have clashed with university presidents over their differing opinions on how public institutions should operate. Texas regents appointed by Gov. Rick Perry (R) have aggressively questioned faculty workloads, program offerings and tuition cost, leading to explosive clashes with the University of Texas at Austin’s president, William C. Powers Jr. North Carolina Gov. Pat McCrory (R) said in a radio interview this year that the state should focus on funding university programs that lead to jobs and not liberal arts courses pushed by the “educational elite.”

The U-Va. board has turned over since June, and some members directly involved with Sullivan’s ouster are gone. Gov. Robert F. McDonnell (R) has appointed 13 of the board’s 17 members.

He also reappointed Dragas last summer and said that her “serious critique of the challenges facing the university is a voice that must be heard.”

McDonnell has asked legislators to allocate more money to public universities, with an understanding that schools will keep tuition increases modest and curb administrative costs. Legislation passed in 2011 pushes colleges to create or enhance programs that could lead to more jobs, especially in the fields of science, technology, engineering, math and health care. It also calls for growing research, enrollment and graduation rates, plus providing “technology-enhanced instruction.”

At a training session for new board members in the fall, Secretary of the Commonwealth Janet Vestal Kelly told appointees that they are expected to embrace the governor’s higher-education priorities. McDonnell and his supporters made sacrifices and spent a lot of money for him to become governor, she said, and that allows them “to set the agenda.”

U-Va. has seen its state funding drop more than 50 percent since the early 1990s, when adjusting for inflation, according to university data.

Still, Virginia lawmakers have maintained — and some would say ramped up — oversight of their public universities. Legislation has prompted U-Va. to increase its enrollment and cap the number of out-of-state or international students. The school’s tuition has dramatically increased in the past decade. Several years brought tuition increases of 8 or 9 percent, although the latest increase was less than 4 percent. In coming years, U-Va. plans for increases of about 3 or 4 percent, according to the financial plan.

U-Va. officials also hope to expand their use of “differential tuition,” charging higher rates for certain majors. U-Va. already charges commerce students a higher rate, and engineering and nursing students in advanced classes pay a per-credit-hour fee.

“We are trying to keep the undergraduate base tuition as low as possible for both in-state and out-of-state,” Hogan said. “We’re in a different day now where you have to have a more sophisticated tuition model to really address the diversity of course offerings, diversity of degrees and, again, the cost of delivering those things.”

Affordability is sometimes a prickly topic at board meetings. Sullivan has begun to tout that Princeton Review named U-Va. the nation’s “best value” public university. Most presidents of prestigious universities avoid giving any public credibility to the ranking industry.

At a February board meeting, Sullivan said: “We have earned this best-in-the-nation value ranking at a time when value seems to be the most critical yardstick by which colleges and universities are measured.”

Jenna Johnson writes about Maryland politics, including the General Assembly, the administration of Gov. Martin O'Malley and the 2014 election.
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