Virginia boasts one of the most lauded public higher education systems in the country. Yet the financial support the state provides that collection of 39 universities and community colleges is among the lowest in the nation.

Years of state funding cuts have led to tuition hikes and an increase in the average amount of student debt. Now Gov. Terry McAuliffe (D) is trying to reverse that trend with an injection of $240 million. If his two-year spending plan is successful, it will be the most significant investment Virginia has made in its college and universities in well over a decade.

As my colleague Laura Vozzella noted, McAuliffe wants new funding for a broad range of higher education initiatives (here are a few highlights):

  • $50 million in incentives for colleges to educate and graduate more in-state and underrepresented students
  • $48 million in financial aid for undergraduates
  • $40 million for one-time incentive packages to help retain high-performing researchers and to establish “centers of excellence” where researchers can collaborate
  • $25.7 million to provide higher education faculty and staff the same 2 percent raise the governor has proposed for other state employees
  • $24.6 million for community college credentialing programs to increase the number of students receiving certifications in high-demand fields
  • $8.1 million to establish an online degree completion program for adult and other non-traditional students
  • $5.3 million for operational expenses to bring Old Dominion University and Eastern Virginia Medical School up to 91 percent of base adequacy
  • $5 million for competitive grants to encourage collaboration among public education, community colleges and four-year institutions in creating effective career pathways
  • $4 million for a cyber range, a platform accessible through colleges and universities to provide training on cyber-attack detection and defense
  • $3 million for cyber scholarships
  • $2.2 million for veteran advisers in community colleges
  • $2 million to increase tuition assistance grants to undergraduate students attending independent colleges
  • $100,000 to study whether the state should take campus sexual assault investigations out of the hands of college officials

“McAuliffe is making a substantial investment in workforce development and in research, both of those will have long-term positive consequences for the economy, job creation and economic prosperity in Virginia,” said Peter Blake, director of the State Council of Higher Education for Virginia.

Scott Ralls, president of Northern Virginia Community College, said the money carved out for credentialing programs would be especially useful for his school. People, he said, are not considering Virginia community colleges for non-degree training because the offerings are not funded at the same level as they are in neighboring states like Maryland.

“For many folks pursuing those credentials to get ahead in the workplace the challenge is cost,” Ralls said. “They’re not funded like degree programs, they don’t have financial aid typically. This would certainly open it up to people for whom the cost has been prohibitive.”

McAuliffe has framed his higher education plan as a way to meet Virginia’s need for skilled workers in fields such as engineering and cybersecurity. Before a crowd at J. Sargeant Reynolds Community College last week, he said the investments in Virginia’s higher education system is meant to “steer those institutions toward preparing students to lead in the 21st-century economy.”

State policy decisions have contributed to a seismic shift in the way Virginia’s public colleges are funded in just the last 26 years. Whereas tuition made up less than a third of total education revenue at state schools in 1989, those dollars accounted for 62 percent of the money schools needed to educate students last year, according to the State Higher Education Executive Officers Association (SHEEO).

Virginia’s higher education spending, like many other states, historically rises and falls in lockstep with the economy. Therefore, the collapse of the financial markets in 2008 led to a steady decline in funding. Yet even as the economy rebounded, higher education funding did not. Virginia spends $1,870 less per college student than it did in the 2007-2008 academic year, according to the Center on Budget and Policy Priorities, a think tank.

For Virginia Commonwealth University, state support in the last biennial budget was $52 million below 2008 levels, said Pamela DiSalvo Lepley, vice president for university relations. Budget cuts over the years have affected course offerings, class size, faculty retention and financial aid.

“The budget cuts led the university to re-thinking its entire financial structure,” DiSalvo Lepley said. “Dependence on state support is not a sustainable financial model.”

Although the past few budgets have partially restored state funding, she said VCU students covered 67 percent of the cost of their education, while the state covered 29 percent in 2014. DiSalvo Lepley said the governor’s proposed budget, particularly the increased financial aid, would be “a significant help” in serving students from lower socioeconomic backgrounds.

Brian Whitson, a spokesman at the College of William and Mary, said, “We are far from a known outcome, but there is much good news so far for higher education” in the budget. He said school officials would greatly welcome the proposed money for salary increases to help recruit and retain faculty, funding for research on rising sea levels and support for additional undergraduate financial aid.

“Every governor has been interested in higher education to the extent he had the revenues available,” said Blake of the State Council of Higher Education. “Gov. Mark Warner, after having to cut higher education for a couple of years, invested substantially in his last budget as a result of tax reform changes. Gov. Tim Kaine had a harder time because of the economy. Gov. Bob McDonnell was a friend of higher education to the extent that the economy allowed it.”

Still, higher education has taken a back seat to K-12 education and Medicaid in state general fund budgets, the portion financed primarily by taxes, across the country. State legislatures have argued that public colleges have the capacity to absorb funding cuts because they have separate budgets, reserves and revenue streams. If universities lose a few million dollars in state support, they could always cut staff, reduce classes and raise tuition. And that’s exactly what many schools have done.

In Virginia, the sticker price at public colleges and universities has increased an average 36.2 percent above the rate of inflation since the 2007-2008 school year, compared to an average 28 percent nationally, according to the budget think tank. Even though funding for the state’s primary financial aid program, the Virginia Commonwealth Award, has climbed since the recession, it has not kept pace with the cost of going to school, neither has federal grants, according to liberal think tank Demos.

Since individual schools in Virginia set their own tuition, price increases have varied across the state. Published in-state tuition and fees at the University of Virginia, for instance, rose 11 percent to $14,468 in the last year, and 24 percent in the last five years, according to the College Board. William and Mary, meanwhile, increased in-state tuition 14 percent for new students, but guaranteed that they would face no further tuition hikes for the next four years.

An influx of people enrolling in college, especially during the recession, placed added pressure on already stretched school budgets. Policy analysts at Demos said Virginia’s public colleges and universities have been inundated with students over the past two decades due in part to the high share of the state’s high school graduates enrolling in college. Total full-time enrollment in state schools has increased 55 percent from 202,285 full-time students in 1991 to 302,473 in 2012.

“There is a growing awareness that for years schools were able to prop up a very good system of higher education through tuition increases, but the realization is it can’t go on forever,” Blake said. “It’s just not sustainable. I’m hearing that more from institutions and from Richmond. I think the governor’s budget drives that home.”

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