Looking to cover a state-mandated salary increase for employees, VCU is pondering a tuition hike for the first time in three years.
The university is weighing an increase of between 3 percent and 6 percent to tuition rates for both undergraduate and graduate students, CFO Karol Kain Gray told the Board of Visitors during a budget work session Tuesday.
Gray said she was leaning toward a 3 percent hike, though she cautioned that the level of state funding VCU receives will be a determining factor. The General Assembly hasn’t yet finalized a budget, so it isn’t a done deal how much state funding VCU will get.
“Knowing what I know now, my recommendation would be 3 percent is reasonable and 6 (percent) is too high. But it’s contingent on where we land with state support,” Gray said.
The proposed hike is in response to a state-mandated salary increase, inflation and the need for additional student financial aid.
An in-state undergraduate enrolled in 15 credit hours per semester would pay about $15,600 in tuition and fees in the 2022-2023 academic year if tuition is hiked by 3 percent, compared with the approximately $15,000 those students pay in tuition and fees under the current FY22 budget, according to the budget workshop presentation.
A 6 percent increase would translate into tuition and fees of just over $16,000.
Out-of-state students would pay about $37,500 in tuition and fees with a 3 percent hike and about $38,500 with a 6 percent increase.
VCU is also weighing increases to student fees (about 5 percent for in-state students and about 4 percent for out-of-state students), and those increases are factored into the above numbers.
Room and board are also proposed to increase by about 5 percent.
Gray drew particular attention to $52 million in what she called educational and general “needs” to be addressed in the upcoming budget. Much of that is comprised of the $24 million required for the state-mandated salary increases, of which VCU would cover half the total.
The raise would be a 5 percent merit-based salary increase for university faculty and staff.
As part of those expenses, the university would seek to earmark $3.2 million in new undergraduate financial aid on top of $16 million needed to sustain the university’s current funding for financial aid, alongside additional workforce compensation and other expenses.
“We have a lot of pressure on the university just to sustain current financial support, not only for undergraduate education but we have graduate tuition waivers and we have military waivers we have to continue to cover,” Gray said.
Tuesday’s update on potential tuition increases was a preliminary budget conversation, as university staff continues to develop a draft and keep an eye on the General Assembly, where it’s unclear when stalled state budget talks may continue, as the Richmond Times-Dispatch reported Monday evening.
VCU might have to make cuts to help cover expenses in the FY23 budget, Gray said. What those cuts would entail hasn’t been determined yet, but they would not be across the board.
“We have to sit down and plan. We anticipate if there’s a 3 percent (tuition increase), there would be about a 1-and-a-half percent budget cut but it’s going to be strategic,” Gray said in an interview after her presentation.
She said an overall budget figure hadn’t yet been determined Tuesday.
The Board of Visitors is expected to adopt a budget and take final action on the question of a tuition increase at its May 13 meeting.