Dec 29, 2009

UVA Signals Major Tuition Increase

Tucked deep within the columns of a Washington Post article on college affordability, a warning light flashed indicating that University of Virginia (UVA) officials are contemplating a major tuition increase for the 2010-11 school year. Although no figures have been released, the Post reports UVA administrators hinted that “…they have been forced to raise the price of admission significantly.” Whether this refers solely to the past or signals what can be expected for the New Year is left for the reader to decide.

While a tuition hike for Virginia students would not be surprising, the magnitude might raise serious affordability issues for students already struggling to pay rapidly increasing tuition bills. A decade ago, tuition excluding room and board was a little over $4,000 for in-state students and about $17,000 for out-of-state students per year. With last year’s increase, residents now pay $9,672 and nonresidents are charged a whopping $31,672 per year.

A state-wide 15 percent reduction in funding for four-year colleges resulted in general belt-tightening measures for all of Virginia’s public institutions. Both the College of William and Mary and the University of Mary Washington were forced into unusual mid-year tuition increases to cover part of the shortfall.

At UVA, the $19 million reduction in state revenue was exacerbated by losses in the school’s endowment, which declined from $5.1 billion on June 30, 2008 to $3.9 billion six months later. So far, administrators remain committed to offering financial aid to anyone who needs it, but to cover these growing expenses they may have to look beyond job eliminations for sources of revenue. Pushing the state-imposed limit on non-resident students and/or drastically increasing tuition rates for all students seem most likely.

Last year’s tuition increases of 4 percent for in-state students and 7 percent for out-of-state students were far lower than originally estimated because of the receipt of federal stimulus funding. Without a similar boost in revenues, UVA may be forced to look at double-digit increases. If so, prospective students, as well as those already on campus, should be prepared to make serious adjustments to their education budgets. Relative value and college financing strategies also might also come into play if tuition goes up by more than 10 percent.

Hopefully, the UVA Board of Visitors will act early in the new year so as to give students and their families adequate notice of any tuition increases planned for next fall. Last year, tuition rates were set two weeks before the May 1st deadline by which enrollment decisions must be finalized for incoming freshmen. If early signals coming from Charlottesville are any indication, UVA administrators already have an idea how big the hit will be and they should share that information sooner rather than later.

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