VIRGINIA'S COLLEGES and universities are in a financial vise again. State funding is being cut, and the General Assembly has voted to cap tuition increases that the institutions need to offset the lost state aid. University officials throughout Virginia say the tuition limits would seriously hinder their ability to serve the state's exploding number of high school graduates. The combination of state aid cuts and tuition ceilings translates into reductions in course offerings, failure to recruit or retain top faculty members, and crimps in scholarly research and local community outreach programs. George Mason University Rector Edwin Meese III has warned that because GMU has a high percentage of in-state students, a cap "would unduly penalize this institution," which is one of the few schools in the state committed to taking a large proportion of the anticipated 40,000 Virginia high school graduates expected to seek a college education in Virginia over the next eight years.

State support to George Mason has dropped from $118 million in fiscal 2002 to a proposed $88 million in 2004. GMU President Alan G. Merten notes that each tuition increase has meant using more student aid money; and when cuts must be made in class offerings, some students end up paying for a fifth year in order to graduate. Currently, in-state undergraduate tuition and fees total $4,800 a year. At William and Mary, state aid has dropped by $27.5 million over the past 30 months; the college made up some of this loss by increasing tuition, as well as by cutting its operating budget and eliminating programs and positions.

Under the legislature's plan, tuition increases would be limited to an average of about 7.5 percent. That may seem to be sufficient, but not when the state is cutting its aid. When it is not providing adequate funding, at least it should not be preventing institutions from making rational pricing decisions.

State tuition policies need rethinking. When scholarships, work-study programs, grants and other compensation are taken into account, only a small percentage of students pay the "sticker price." Shouldn't tuition policy be left to the governing boards instead of to lawmakers who slap on tuition caps? How low should in-state tuitions be kept, anyway? A number of college presidents report that when tuitions go up, they hear few complaints. Rather than trying to compensate for losses in state support by recruiting more out-of-state students at higher rates, why not couple more in-state tuition increases with need-based tuition aid?

The universities need more flexibility. Gov. Mark R. Warner (D) has said he will review the tuition cap legislation. He should do more than that; a veto is in order -- with a full-court press to sustain it.