After holding tuition flat for five years for in-state undergraduates, planning the next four years is critically important to ensuring the university’s resources match its expectations of quality, the William & Mary Board of Visitors discussed Friday. The board heard two presentations demonstrating the impact of five years of flat tuition on key components of educational quality, and, projecting forward, what four more years of flat tuition would entail.

The board will consider the university budget, including undergraduate tuition, at its April meeting.

“The purpose of today’s discussion is to provide the board with context for the critical fiscal decisions we have ahead,” said Rector Charles E. Poston J.D. ‘74. “We asked the administration to outline for us where they saw potential budget impacts on the hallmarks of a William & Mary education. We never want our wants or our needs to be separated from the fiscal realities.”

Flat tuition during unprecedented times

In their presentations, William & Mary President Katherine A. Rowe and Chief of Staff Jeremy P. Martin Ph.D. ’12, M.B.A ’17 detailed the university’s quality commitments, operational efficiencies gained in recent years and the fiscal impacts tied to tuition decisions. They emphasized the strategic and planning advantages of establishing multi-year revenue models.

Thanks to increased funding support from the Commonwealth, optimized enrollment, and thoughtful planning across the institution to reduce university costs, William & Mary advanced its mission while at the same time not raising tuition rates for Virginia families, Rowe explained to the board. This was achieved despite the economic pressures that came with operating during pandemic and rising inflation.

“We are thankful to the Governor, the General Assembly, the board and everyone on our team and campus for making flat tuition possible during unprecedented times,” Rowe said in a presentation to the board. “Because of that support, we have been able to do something remarkable — hold down costs for families, advance institutional priorities, and provide salary increases for our dedicated faculty and staff.

“Few institutions in the country have achieved what we have in the past five years. We also learned a lot during this time. We understand the need to plan thoughtfully for the long term and ensure predictable resources to sustain our high expectations for quality. That is what we are hoping you take away from today’s discussion.”

Compounding tuition gap

The 2022-23 academic year is the fifth year in a row that the university has held tuition flat for in-state undergraduates. Out-of-state tuition has been flat for four years running. As a result, resources available to enhance the educational experience have been limited, including for programming that may ultimately be revenue generating. The university’s focus in recent years has been annually addressing its increasing costs, some of which are mandated by the Commonwealth or driven by inflation, without the ability to make longer term plans. While currently on sound fiscal footing, the impacts of continued flat tuition will compound — resulting in a projected $15M budget shortfall in just four years, the presentations showed. 

Rowe detailed for the board a number of commitments important to sustaining and advancing the quality of the institution, commitments that would be difficult to achieve without additional revenue. Embedded within its Commonwealth-approved mission statement, the institution promises a preeminent educational experience. Close mentoring, experiential learning opportunities, research experience and interdisciplinary study are made possible by such resources allowing low student-to-faculty ratios and smaller class sizes, Rowe added.

“Any degree of deficit will impact our ability to offer the closely mentored learning experiences that define a William & Mary education as well as our ability to continue to attract talented students, faculty and staff,” Rowe said. “The quality of education this community provides to its students is vital to their success and therefore to the university’s success. If we don’t attract additional revenue resources we will weaken our fundamental value propositions.”

Resources and rankings

Rankings, while neither the only nor the primary indicator of excellence, are widely used markers of the quality of educational experience a university provides, including reputation.

Consistently ranked among the nation’s Top 50 universities in major surveys, William & Mary is broadly recognized as a leading university. Between 1996 and 2018, William & Mary had one of the most stable ranks in U.S. News & World Report’s annual survey, appearing between 29th and 34th among all universities nationally.  

However, rankings surveys often adjust their methodologies. Those changes, like U.S. News’ addition of a social mobility index in 2019, can have large impacts on rank.

“We exist in an extremely compressed range where minute differences are determining changes in rank,” Martin said. 

As the university has recognized, current Pell Grant enrollment is below the level desired by the board and administration. That percentage has impacted the university’s U.S. News ranking since 2019, Martin said. The university announced in September a commitment to increase the in-state percentage of Pell recipients to 20%.

“Recognizing the grit of students who have overcome socioeconomic challenges as a strong indicator of talent, specifically to move that needle on Pell Grant enrollment, is part of sustaining our preeminence as a university,” he said.

Martin said another key factor in W&M’s U.S. News ranking was predicted graduation rate. 

“William & Mary has one of the highest graduation rates in the country, among the very highest for public universities. Yet, based on our student demographics, U.S. News thinks that we should be doing even better,” Martin explained.

Unless these shortfalls are mitigated, Rowe emphasized, impacts on quality measures to which William & Mary is committed could come swiftly. Those include: the caliber of faculty and students our community attracts, close faculty mentorship of students, experiential learning and internships, infrastructure upgrades, need-based aid commitments as well as programs within Vision 2026.

For the past decade, the university has steadily improved operational efficiency — a trend that the pandemic accelerated. While those improvements will continue moving forward, they will be insufficient to provide budgetary relief at the scale required, the presentations showed. Coupled with several factors out of the university’s control — rising inflation and state mandated cost increases — these budgetary realities paint a complicated fiscal picture. Additionally, given the magnitude of state-mandated cost increases, the Commonwealth’s ability to cover a larger portion is minimal. 

These impacts, the presentations emphasized, could contribute to downward pressure on rankings. That could in turn impact alumni engagement as well as the perceived value of a W&M degree. “Alumni and a lifelong engagement with them are central to the William & Mary community and vital to who we are as an institution,” said Martin.

Multi-year tuition options

In order to give students and their families time to make informed decisions, as well as provide the university the flexibility it needs to plan forward, returning to a four or six-year planning cycle is key, Rowe said.

Hypothetical alternatives were presented to the board, including increased investment by the Commonwealth to restore the inflation-adjusted levels prior to 2001, which would offset institutions’ dependence upon tuition. Last year, the Governor and General Assembly provided additional investments that, in part, supported institutions’ abilities to hold tuition flat. 

A second scenario included a W&M Promise-like approach to establishing a consistent, low percentage tuition increase each year for newly enrolling students without increases for currently enrolled students. This scenario projected a continuing deficit.

Additional scenarios modeled adopting in-major fees for upperclassmen, an approach seen at other universities in Virginia, and applying an inflation-based tuition adjustment following a 10-year trailing average on the Consumer Price Index (CPI). Both of these scenarios projected eliminating the deficit and providing investable revenue.

Rowe presented these hypotheticals as guides to long-term planning, not as proposed actions, noting that the board will not vote on undergraduate tuition until April 2023. And she emphasized the critical importance of maintaining the quality of student learning experiences to ensure their future success. 

“Overall, we know that William & Mary graduates enjoy the highest percentage gains in salary of any Virginia public university over the course of their careers. It is that caliber of education we must continue to provide: cultivating creative thinkers, principled leaders and passionate global citizens,” Rowe said.

, University News & Media