BOV Fall 2010: College assets rebound in September
October 4, 2010
The College of William and Mary’s investments, relationship with the Virginia legislature and tuition policies were key topics of discussion during the Board of Visitors Committee on Financial Affairs meeting Oct. 1.
“It’s choppy, but things have sort of turned around,” Vice President for Finance Sam Jones ’75 said.
According to a report presented to the BOV, the College’s investments are solid, due in part to the success of equity markets this past September.
The outlook on state funding was also positive. The Commonwealth of Virginia has $71 million in unallocated funds, Jones said, which gives the College the opportunity to make budget requests for faculty and staff salaries, need-based financial aid for students, basic operations support and a higher equipment trust fund. Jones specifically mentioned requests for state funding to offset the construction costs of Alan B. Miller Hall and the new School of Education building.
Despite the possibility of receiving increased financial support, Jones said increased state funding is unlikely.
“We don’t expect there to be a lot of new money coming out of the state,” he said.
According to Jones, a 1 percent increase in every student’s tuition would raise $1 million for the College. College President Taylor Reveley suggested that a 5 percent change in the ratio of in-state to out-of-state students would have a profound effect on the school’s finances.
“But of course that’s unmentionable,” Reveley said.
Reveley proposed that increasing the number of out-of-state students or increasing tuition for in-state students would ease the College’s budgetary woes, but said that both options are unpopular with members of the Virginia legislature. He discussed the disparity between the tuition rates paid by in-state and out-of-state students and the fact that the College meets only 80 percent of the calculated financial aid for those who reside outside of Virginia.
“From the standpoint of community and alumni relations, that is a shocking gap,” he said. “It can’t continue.”
He and Jones hinted that the future success of the College depends on either becoming a private institution, or at least being allowed to have more out-of-state students and charge higher in-state tuition.
“The reason there is lower tuition for an in-state student is because the state is supposed to be filling in that gap,” Jones said. “Because the state is not doing its part, the institution should have the flexibility to deal with that.”
Reveley agreed, saying that the less funding the state provides, the less control it should have over tuition rates.
“Give [funding] to the community colleges, give it to the weak ones, but leave us alone,” he said. “Let us use our strength in the market to take care of ourselves. It’s not that ‘we’re so precious, leave us alone so we can keep being precious,’ it’s also the only way, I believe, in the real world, to sustain the system.”
According to Reveley, there is only one option.
“I don’t see any alternatives to save the system, except acceptance of the public-private nature of higher education,” he said. “The only alternative is that everybody will get worse.”