Can the College of William and Mary still afford to be great and public?
That’s the question many are asking after Virginia ordered the College to cut 6.6 percent of its operating budget, about $4.9 million, on top of a $2.7 million cut in state funding last year.
Budget cuts are nothing new for the College, which has consistently seen its annual state allotment slashed year after year while its endowment lags behind its private peer schools and parts of its infrastructure age beyond repair.
In the 1980s, Virginia provided about 40 percent of the College’s operating budget. That percentage has since decreased to roughly 18 percent and — if the current economy is any indication — the cuts may continue into the next fiscal year, which begins July 1.
The state’s dire financial situation has led some to question whether or not the College would be better off as a private institution, free to raise tuition for in-state students and to generate revenue through more aggressive fundraising rather than increasingly inefficient state lobbying.
“The question of going private comes up from time to time, especially during those times when the commonwealth of Virginia is forced to reduce its support due to declining revenue,” Vice President for Finance Sam Jones said. “While it is disruptive when the commonwealth reduces its support, we still appreciate the significant operating and student aid funds we receive in any given year.”
But some say that state-supported operating funds are a fraction of what can be gained from going private. Allan Meese, the Ball professor of law at the College’s Marshall-Wythe Law School, says that the mandated — and relatively low — in-state tuition is hurting the College’s finances and making it less competitive.
“Right now there is an artificial ceiling on what we charge 65 percent of our students,” Meese said, referring to the majority of Virginian College students who pay reduced tuition. “If we were private, there would be no such thing as ‘in-state tuition.’ We would charge all students the same tuition, presumably what we are currently charging out of state students.”
So, all students at a private William and Mary potentially would pay as much as $39,600 a year, which is the current out-of-state rate.
Doing so, according to Meese, would generate an added $70 million in revenue for the College, which is more than 1.5 times what the state grants the College annually.
The numbers might sound appealing, but some at the College have concerns about how privatizing the College would affect access and the role of the public institution in American society.
“I believe in public higher education,” College Provost Geoff Feiss said. “I just believe that public higher education is a social good, and as a social good the society should pay for it.”
Feiss doubts the College’s financial ability to go private without a significant tuition increase, especially due to its relatively small endowment of $586 million.
“If you were to replace the state funds with interest on endowment, the College would need [a] $1 billion endowment,” Feiss said.
Feiss said that the College is in the midst of one of the largest building booms in College history, which has been supported in large part by the commonwealth. He said that the new school of education, the Integrated Science Center, the law school library and the upcoming renovation of Tucker Hall — a building infamous for its disrepair — are all state-funded.
Both Jones and Feiss said that there is little incentive for Virginia to give up ownership over the oldest public higher education institution in the country.
“The College cannot ‘unilaterally disarm,’” Jones said. “That is, we cannot just declare ourselves private. The state would have to allow us to go private and it is not clear why they would consider such a change.”
“Why would the commonwealth want to let us go?” Feiss asked. “They’re proud of William and Mary.”
Meese argues that the commonwealth has a large incentive to free itself of the College’s financial burden. He proposes a “win-win” trade between the College and Virginia in which the state allows the College to keep its land and buildings while reducing its annual appropriations to $0.