The Board of Visitors’ Finance Committee approved increases in tuition and fees for the 2022-23 and 2023-24 academic years Friday morning. The Committee met in-person at the Rotunda at 8:30 a.m. with a live stream option for public viewing.
Undergraduate tuition will increase by 4.7 percent for the 2022-23 school year and an additional 3.7 percent for 2023-24. For first, second and fourth-year students in the College of Arts and Sciences, the current cost of undergraduate tuition for fall 2021 is $14,188 for in-state students and $48,036 for out-of-state students. The cost is $16,888 for in-state third years and $50,736 for out-of-state third years because of a tuition increase plan that the Board approved in 2019.
Per a slideshow presented during the meeting, a one percent increase in tuition generates a $3 million net gross for the University. A 3.5 percent increase, by contrast, generates a $10.5 million net gross for the University. These funds go towards costs the University is facing with inflation, merit increases for faculty and staff, utilities and library collections and minimum wage and pay for front-line worker increases. In January 2020, the University officially increased its employee minimum wage to $15 per hour. The minimum wage in Virginia increased to $9.50 per hour in May 2021 and is set to increase to $11 per hour in 2022 and $12 per hour in 2023.
The Board held a workshop and public comment session on tuition Dec. 2 at 3 p.m. while classes were in session. Approximately 17 people attended the meeting, seven of whom were members of the Board. No questions or comments were made by the public on the proposed increase.
Mandatory fees will increase by $128 and $134 in 2022-23 and 2023-24, respectively. Current mandatory fees are $3,222 for in-state students and $3,904 for out-of-state students.
These fees will go to student health — including access to mental health services — to address increasing volumes in “general medicine, counseling and psychological services, and accessibility needs across Grounds,” according to committee documents. Students have voiced concerns about the lack of timely access to mental health services — the University rolled out on-demand telehealth counseling called TimelyHealth in September to alleviate some of these demands.
The tuition increase is based on an assumed increase in the Higher Education Price Index at or around 2.7 percent. HEPI is used to measure how inflation rates affect costs for institutes of higher education in the U.S. As HEPI has increased over the last seven years, in-state tuition increases have been kept below these percentages.
Rector Whittington Clement addressed concerns many University members had about why the University does not use endowment growth to cover costs instead of raising tuition. The University’s endowment reached a record-high of $14.5 billion in the 2020-21 fiscal year. About 76 percent of the endowment is restricted by donors who have specific intents for the use of the funds.
Clement said endowment returns are not sufficient to support students alone.
Chief Operating Officer J.J. Davis added that raising tuition aligns with the University’s 2030 Strategic Plan, which aims for the University to become the best public university by 2030 through initiatives such as cultivating staff success, creating the School of Data Science and building pathways to research preeminence.
The University is one of two public universities with a need-blind admissions policy, along with the University of North Carolina at Chapel Hill. Through AccessUVA, the University meets 100 percent of demonstrated need. Because the University implemented a tuition freeze last year after student advocacy efforts, Davis said, it is at a “competitive disadvantage” to other schools and not meeting the Board’s current plan.
“We are generating significantly less resources than we anticipated,” Davis said.
University President Jim Ryan added that the University is not keeping up with its competitors when it comes to faculty salaries. In 2020-21, the University ranked No. 29 amongst its Association of American University peers even though the Board approved a resolution in 2013 to achieve a top 20 AAU faculty salary ranking by 2017.
U.Va. Wise will have an expected 3 percent increase each year in tuition in addition to increases in fees for in-state and out-of-state students over the next two years.
The Board additionally passed a resolution to increase faculty and staff housing rates. The University operates 80 faculty and staff housing units, and approved an average 4.0 percent rent increase to align with the market rates required by the Commonwealth.
Student housing rates will also increase. The average double-room rate was approved to go up to a rate of $7,096 for the 2022-23 academic year — an increase of about $270, or 3.96 percent from this past year. Previously, the University has proposed an on-Grounds housing requirement for second years, which could increase housing options for students and help drive down rents.
Dining service rates will increase by $157, or 4.3 percent, in 2022-23.
The Board then passed its financial plan for the Karsh Institute of Democracy with an estimated project budget of $80 million. This includes $5 million in gifts and $75 million in debt to be repaid by gifts. The Institute — which will combine the efforts and scholarship of the University’s many centers and institutes, including the Democracy Initiative and the Miller Center — was made possible by a $50 million gift from the Karsh family, announced in June.
The Board also approved a divestment of $10.3 million from its Special Gift Restricted Quasi Endowment Fund to provide support for athletics initiatives and will fund the construction of a Football Operations Center. This fund was established in 1997 with various gift funds and as of Sept. 30, its investments total $51,771,922. The divestment will fund the construction of a Football Operations Center.
Davis said that the University sustained $128 million in expenses or revenue losses in the 2020-21 academic year due to COVID-19. The University received over $50 million from the U.S. Department of Education under the Higher Education Emergency Relief Fund in three separate payouts. The Board is still seeking about $35 million in additional recovery from the Commonwealth.
The Board must wait for the Virginia General Assembly to approve its budgets in 2022 since these increases depend on funding from the Commonwealth. The House Appropriations Committee and Senate Finance & Appropriations Committee will complete action on budget bills Feb. 20. Ryan noted that the University’s schedule purposely does not align with the General Assembly schedule. In 2022, the General Assembly is scheduled to convene on Jan. 12, 2022.
“The timing of when we set tuition is driven by the desire to give parents and families as much notice as possible,” Ryan said. “If something cataclysmic happens, we would go back and increase tuition — but that is highly unlikely.”