Virginia Higher Ed Funding Has Miles to Go

Blogs, Letters & Testimonials

July 15, 2021

By James Murphy and Michael Dannenberg

As Governor Ralph Northam heads into the final months of his term in Virginia, he can look back on his years and take credit for doing more to reduce the inadequacy and inequity in higher education funding than any other governor of the Commonwealth this century. He increased funding to higher education, pushed for increased support for the state’s public Historically Black Colleges and Universities (HBCUs), and introduced important student aid reforms.

It’s a bright record, but it owes some of its luster to the fact the state of higher education financing and student aid has been so dismal in Virginia for the past two decades. It’s easier to shine in the dark, and despite the prestige of some of its public colleges and universities, things have been dark for many years in Virginia higher education. It’s time to make one of the nation’s strongest higher education systems a system for everyone, where schools are funded equitably, rationally, and transparently in order to increase access, affordability, and completion and hold institutions accountable for results.

The Governor’s restoration of funds to higher education came after two decades of disinvestment (with the occasional increase) in the state’s community colleges and public universities. And Northam’s financial aid reforms came after discovery that Virginia’s main student aid program formula was essentially cheating the poorest students–those with no expected family contribution.

As the Commonwealth prepares to elect a new governor this fall, one of the most pressing issues facing the winner will be whether Virginia will continue to make efforts to increase to access, equity, affordability, and completion in higher education or will it carry on with a still inadequate, inequitable, and often irrational public higher education finance system that’s very much in need of reform?

The Need to Boost Public Higher Ed Funding

Even with a significant increase in state investment for the most recent fiscal year, public support for Virginia higher education has not kept up with rising costs and an expanded pool of students, leading to some of the highest public college tuition and fee levels in the country and ever rising student loan debt, particularly for working-class, low-income, and racial minority students.

In 2020, Virginia ranked 44th in state funding for two-year community colleges per full-time equivalent (FTE) student and 36th in funding for higher education overall despite being among the wealthiest states in the nation.

As state financial support for public higher education has eroded, the burden has shifted to students and their families despite the substantial public benefits attached to a system of quality public higher education institutions.

In 2001, Virginia students paid just 23% of the cost of public higher education and the state paid 77%. In 2019, students covered 52% and the state just 48%. Today, Virginia’s comprehensive public four-year colleges and research universities have the 3rd and 7th highest tuition and fee levels in the nation.
Higher Ed School Finance Inequity That Would Make K-12 Advocates Blush

Not only is Virginia higher ed funding inadequate, it’s highly inequitable. Higher ed school finance inequity is seen when comparing funding for four vs. two-year public colleges and funding among four-year colleges.

For example, Virginia provides 68% more in state funding to public four-year colleges than it does to two-year community colleges per FTE student.

William & Mary University, with a near $1 billion endowment, and the Virginia Military Institute (VMI), with a $540 million endowment, receive more than twice as much per FTE student than most community colleges in the state. The latter are much more diverse than the former.

Moreover, wealthy public four-year colleges like William & Mary receive more state funding per student annually than other four-year colleges like Old Dominion and George Mason that serve a much more racially and socioeconomically diverse student body.

It is good to see the Commonwealth’s two public HBCUs in the second and third spot for state appropriations per FTE student, but as former Governor Doug Wilder recently called out, this support remains inadequate. (Thank you for citing our work, Governor!)

Big Student Loan Debt; Big Racial Equity Problems

Inadequate and inequitable Commonwealth funding of public colleges manifests itself in heightened student loan debt levels, which is particularly concerning with regard to Black students. Consider the data.

Since 1992, the share of Virginia residents that need to take out loans to attend a public, Virginia four-year college has grown from 29% to 51% as of 2018. The average amount borrowed almost doubled between 1992 ($5,589) to 2018 ($10,495), in 2018 dollars. The share of Virginia residents who borrow to attend a community college has been significantly smaller than those attending four-year public institutions, but the proportion increased more than five times, from 2.5% to 12.6% between 1992 and 2018.

Source: SCHEV Table FA33T: Trends in the Percentage of Students Enrolled in the Fall who Borrowed

Almost every Norfolk State and Virginia State student needs to borrow heavily to attend. A quarter of all Norfolk State and Virginia State graduates leave with over $50,000 in debt. Overall, students of color that graduate from four-year colleges in Virginia are more likely to have debt than white graduates (64% to 54%, respectively), and their median debt levels are about $1,500 higher.

That’s frightening, because for a combination of reasons ranging from artificially depressed family wealth (for example, the Fair Housing Act didn’t become law until 1968) to occupational choice to probably most significantly racial discrimination in employment and income, nationally some 24 percent of Black bachelor degree holders default on at least student loan over the course of a 12 year repayment period – a figure four times higher than their white peers.

A Better System

A more rational and equity-minded approach to funding higher education in the Commonwealth and beyond (attention: federal lawmakers) would direct appropriations to  institutions of higher education that enroll greater shares of low-income and working-class students as well as under-represented minorities. It would reward institutions that improve outcomes for these and all students as reflected in graduation rates overall as well as among disaggregated subgroups. It would drive funds to public and non-profit private minority serving institutions directly and reward them for reducing enrollment and completion gaps associated with race and socioeconomic status. It would take into consideration institutional wealth and success. It would support improved academic preparation at the secondary school level so that students are better able to complete their postsecondary education studies in a timely fashion. And it would provide a debt-free higher education guarantee to students from working class and low-income families who rigorously prepare for college and work a minimum while attending.

When voters go to the polls in November, they should be looking for the person who will not just continue Governor Northam’s efforts to increase investment and equity in Virginia higher education financing and financial aid, but speed up and improve those efforts as well.

More of the same or worse turning back the clock to past disinvestment and privatization of public higher education should not be an option. Virginia needs a new vision for education equity and genuine, lasting socioeconomic mobility.

# # #