304 posts tagged VCU
The VCU Board of Visitors soon will adopt a budget for the coming year. The 2013-14 budget plan may include a tuition increase, a change in the tuition cost structure for new students - freshmen and transfers - and significant measures to reduce expenditures and reallocate savings to the core academic mission.
Despite recent reversals in the trend to cut state funding for higher education, VCU still suffers the impact of the largest reduction of state support in its history. While VCU continues to cut costs and create efficiencies, the university can go only so far before the foundation we’ve built toward becoming a nationally competitive university erodes.
The proposed measures have been carefully considered. We believe they are necessary to provide students with a national-caliber educational experience at VCU that is consistent with a premier urban, public research university.
Here are some of the details and reasons behind these recommendations to the board.
Challenging financial situation
VCU’s funding situation is unique in the commonwealth. We share a position among the state’s Tier 3 universities - the University of Virginia, Virginia Tech and the College of William & Mary. We are proud to serve the largest in-state student population. However, that distinction means VCU does not have the buffer of higher out-of-state tuition revenues provided to our peer institutions.
Additionally, despite our status as a national research university, our tuition is the lowest of our peers and ranks roughly in the middle of the state’s four-year institutions. VCU’s historically low tuition rates are remarkable given our economic challenges. Even with increases in state funding this year and last, for which we are grateful, state support remains nearly $52 million below 2008 levels.
There are budget challenges beyond tuition. For example, VCU faces $18 million in new, unavoidable costs next fiscal year - which are defined as costs that VCU must incur for contractual or legal reasons. A significant portion of the unavoidable costs is because of very modest and well-deserved faculty and staff raises, the first in five years. While the state requires the raises, it does not fully cover the cost, and VCU must fund the remainder. Other unavoidable costs include state employee health care premiums, retirement benefit increases and utility cost escalation. In total, new state appropriations will cover only about half of these unavoidable costs.
Without a tuition increase and some new, market-based tuition strategies, there will be little that VCU can do to move forward with academic priorities beyond meeting those unavoidable costs.
Revenue generation to support quality education
VCU’s budget priorities reflect Quest for Distinction strategic plan priorities for a quality education: faculty recruitment and retention, student scholarships, financial aid and support services, and academic and research spaces.
VCU is pursuing all reasonable sources of revenue. Fundraising is a top priority for my senior team and me. Improving the return on our investments and cash management is another. New entrepreneurial initiatives also are underway.
However, the stark reality of 2013 is that tuition and fees are the major revenue source for instruction in public universities. The state no longer is able to subsidize higher education as it has in the past. We recently undertook an in-depth study of tuition strategies, getting input from hundreds of students who participated in surveys, focus groups and, most recently, meetings with the university’s chief academic and operating officers.
Several options were dismissed based on student feedback. While no one wants a tuition increase, other options seemed to be more palatable and will be presented to the board for consideration:
- For all students - a proposed 4.19 percent increase (or $414) in tuition and mandatory fees. Even with these new rates, VCU would remain in the middle of the state’s universities in terms of a tuition increase and 2013-14 tuition and fees.
- For new students - freshmen and transfer students - a proposed per-credit-hour pricing structure based on the 2013-14 rates for the first 14 credits taken with additional credits at 15 hours and more discounted by 50 percent from the 2013-14 rate.
- For returning students - continue with the current “block” pricing structure, paying one price for a block of 12 to 18 credits, with overload pricing for 19 or more credit hours.
Current students are able to take 13-18 credit hours without any additional charge, which means VCU subsidizes those credits above the full-time level of 12 credit hours. Unfortunately, following years of reductions resulting in the largest loss of state appropriations in the university’s history, VCU no longer can support a strong academic mission with subsidized tuition. Per-credit pricing is a market-based, pay-for-what-you-consume tuition strategy that generates additional revenue and enables the university to better manage course sections, faculty assignments and classroom availability.
The tuition increase must be coupled with ongoing cost-cutting and operational efficiencies where appropriate, with those savings directed to the core academic mission.
The VCU Board of Visitors will make a decision on tuition and fees at its May 10 meeting. This decision comes following months of thoughtful examination, and we are grateful for every member’s diligence in advocating for students, faculty and staff.
The work of a great university is about shaping the future of society. It is primarily an investment in people — in students, faculty and staff.
Your hard work and commitment is why VCU’s reputation is rising so quickly across the country and around the world. This must be combined with a strong foundation of investment in faculty, student success and spaces to solidify VCU’s position as a nationally competitive public research university. I am committed to ensuring that every student’s degree will be competitive anywhere in the world.
I wish you well as this academic year draws to an end and thank you for your essential contributions in making VCU the great university it is today.
Questions about the budget or tuition?