The good news: No state-supported colleges are in danger of closing.
The maybe not-so-good news: A report by the General Assembly’s watchdog agency says seven of them should be monitored more closely and three have “some viability risk” because of declining enrollment and other factors.
The seven: Christopher Newport University, Longwood University, Norfolk State University, Radford University, the University of Mary Washington, the University of Virginia’s College at Wise and Virginia State University.
The three of those singled out most: Radford, Mary Washington and Virginia State.
The main driver behind this report on “Higher Education Institutional Viability” is the nation’s falling birth rate, which is about to catch up with us. Earlier this month, demographer Hamilton Lombard of the University of Virginia’s Weldon Cooper Center for Public Service wrote an unrelated report on state population trends. Among the things he had to say: “Since 2007, the number of births in the U.S. has steadily declined meaning that after 2025, even if the country experienced a baby boom this year, the number of Americans turning 18 will continue to decline at least until the 2040s.”
For colleges, this is called “the enrollment cliff.” They’ve seen it coming for a long time but there’s nothing colleges can do to promote procreation. In theory, they’re all scrambling to deal with a smaller pool of traditional college-age students, but this report by the Joint Legislative Audit and Review Commission details other ways that some state colleges are being squeezed — a reevaluation of the benefits of a four-year degree is sending some college-age students into the trades, and larger institutions are better able to attract students, which sometimes comes at the expense of smaller ones.
This report also poses some policy questions that state legislators and the governor, both the current one and others to come, will have to wrestle with. Among them:
- How much can and should the state spend to support higher education?
- What, if anything, should the state do to intervene in an academic free market that is seeing some schools grow and others shrink? Put another way, should the state try to curb enrollment growth at schools such as Virginia Tech and try to direct those students to, say, Radford? (That’s easier said than done because students may be interested in programs that some schools don’t have.)
- Should the state cut tuition for out-of-state students as a way to attract more of them?
The national picture: Some colleges are closing
Before we crack open the JLARC report, let’s look at the national context. A lot of small colleges are being squeezed out of existence by declining enrollment and the financial problems that follow. University of Tennessee professor Robert Kelchen says 40 colleges closed in 2023. The ones most vulnerable have been for-profit schools and small, private, church-affiliated schools that most of us have never heard of. It’s unusual for a state-supported school to go under but sometimes it does happen. This year the University of Wisconsin closed its Oshkosh-Fond du Lac campus due to declining enrollment.
There is absolutely nothing in this report that suggests any state-supported school in Virginia is in danger of collapsing, but this is the national environment in which this inquiry takes place.
Declining enrollment means declining tuition revenue. Some businesses, when faced when declining revenues, can cut expenses. JLARC explains why that’s not always possible for college: “Higher education institutions are generally unable to reduce their expenses proportionately when enrollment and revenues decline because many costs are fixed (e.g., building maintenance, debt service, tenured faculty). Furthermore, reducing spending on academics or campus facilities and amenities may contribute to decreasing interest in and enrollment at these institutions.”
The enrollment crunch is going to spur some uncomfortable conversations about higher ed funding. This JLARC report is one of them.
Big schools are growing; smaller ones are shrinking
Over the past decade, enrollment at state-supported schools in Virginia has increased by 6%, the JLARC report says, but that growth has been concentrated in just six of the state’s 15 public colleges. Nine others saw enrollment decline even at a time when enrollment overall was growing, which raises questions about how they will fare when overall enrollment starts declining. The school with the largest enrollment decline during that period: Radford University. The report points out that the enrollment growth at George Mason University and Virginia Tech was more than the entire enrollment at seven smaller schools combined: Christopher Newport, Longwood, Norfolk State, Mary Washington, UVA Wise, Virginia Military Institute, and Virginia State.This seems to be the university equivalent of “the rich get richer.”
The JLARC report says this isn’t unusual: “Large and flagship institutions have generally experienced enrollment growth nationwide, while many smaller, regional institutions have experienced enrollment declines.”
Out-of-state students disproportionately benefit only a few schools
Colleges like out-of-state students because they pay “full freight,” unlike in-state students who get a discount on tuition. Over the past decade, the number of out-of-state students at Virginia’s state-supported schools has increased by more than 10,800 — 23% — but that growth has been concentrated at just four schools. Of those out-of-state students, 98% have gone to George Mason, the University of Virginia, Virginia Tech and William & Mary. That’s helped them financially; other schools haven’t gotten that out-of-state financial boost.
CNU, Longwood, Norfolk State, UVA Wise flagged for risk factors but rated ‘low risk’
Schools were evaluated on eight factors: enrollment, retention, graduation rates, pricing power, facility age/condition, financial ratios, state funds per student and endowment.
Four schools were flagged for having “at least one risk factor that should be monitored going forward.” For Christopher Newport, that was enrollment and financial ratios. For Longwood, Norfolk State and UVA Wise, it was pricing power, meaning the school’s ability “to charge enough tuition to support the institution’s operations and enroll enough students willing and able to pay that tuition.” Schools with higher pricing power can get away with higher tuition because there’s more market demand for those institutions.
JLARC warned that some schools wind up discounting tuition too much. “Between 2015 and 2022, Norfolk State experienced a 20 percent decrease in tuition revenue per student, UVA-Wise experienced a 17 percent decrease, and Longwood experienced an 8 percent decrease,” the report said. “None of these decreases was substantial enough to warrant a rating of substantial or extreme risk, but continued reductions in tuition revenue could result in substantial or extreme risk to their pricing power.”
Radford, Mary Washington and Virginia State were flagged for ‘some viability risk’ but for different reasons.
The report had positive things to say about each one but also highlighted some concerns that put them on the list. “Mary Washington and Radford have experienced enrollment declines that have resulted in decreased tuition revenue,” the report said. “Virginia State faces difficulty charging enough in tuition to fund its operations while still meeting its mission to serve students with high financial needs.”
Let’s go through them one by one.
Radford is at ‘substantial or extreme’ risk for enrollment declines but president says he’s turned that around
As we saw earlier, Radford has seen the biggest enrollment decline of any state-supported school over the past decade. That decline has mostly come since 2019. According to the enrollment database maintained by the State Council of Higher Education in Virginia, Radford’s enrollment was fairly consistent from 1992 to 2018, somewhere between 8,270 in 1996 and 9,928 in 2013. In 2019, enrollment peaked at 11,870 but fell to 7,531 last year.
JLARC doesn’t explain why enrollment has fallen so much, just points out that it has. It also says that “Radford has been able to weather this enrollment decline because of its relatively strong financial position” and then praises some actions the school has taken to reverse the enrollment decline — revising its recruitment and retention programs, for instance. “As of August 2024, Radford reports based on deposits that its first-year enrollment was likely to increase by almost 30 percent from 1,100 in 2023 to 1,400 in 2024,” the report said.
Bret Danilowicz
In a formal response to the report, Radford President Bret Danilowicz elaborated on what the school has done to increase enrollment. For the current school year, enrollment has exceeded projections, he said, and now stands at 7,686, a 2% increase over last year. He suggested that Radford, and potentially other schools, would be helped if they could attract more out-of-state students — and one thing that would make Radford more appealing to those out-of-state students would be if the school could offer a tuition discount. “In recent years the General Assembly has authorized several public institutions to charge a reduced tuition rate to out-of-state students — less than the higher amount charged to out-of-state students but no less than the tuition charged to in-state students,” Danilowicz wrote. “Receiving this authority would allow Radford to offset recent enrollment declines, utilize available capacity on campus, and increase Virginia’s talent pipeline” — the latter being an important buzzword for many Virginia lawmakers.
Danilowicz also pointed out that “a notable cohort of student growth was in Radford’s nursing programs, which are experiencing a 30% increase this fall.” He predicted future growth in those programs and indicated he’d be going to Richmond to ask for “additional state investments to ensure Radford University’s ability to address the commonwealth’s healthcare workforce needs.”
Virginia State rated at ‘substantial or extreme’ risk in two categories
Those two categories were pricing power and the age/condition of facilities at the nation’s first fully state-supported historically Black college. Virginia State was founded in 1882 and, as a land grant institution, was intended to be the Black equivalent to what we now know as Virginia Tech but wasn’t funded at the same levels.
Pricing power first: “The greater financial needs of Virginia State’s student population explain — and also compound — its pricing power challenges,” the report said. “Virginia State has the highest percentage of students receiving a Pell grant (a commonly used proxy for financial need because only students with low household incomes qualify) of the state’s public four-year higher education institutions. About 70 percent of Virginia State students received a Pell grant over the past five years. (Norfolk State has the next highest percentage of students, 66 percent, receiving Pell grants.) No other Virginia institution has more than 40 percent of students receiving Pell grants.”
Here’s where all this data starts to translate into public policy: “Because of Virginia State students’ high levels of financial need, and the university’s commitment to serve a historically underserved community that typically has lower household incomes than average, Virginia State’s challenges with pricing power are unlikely to change,” the report said.
That’s not all. “Virginia State also faces substantial risk related to the relatively poor condition of its facilities and lack of adequate student housing,” the report said. Virginia State’s facilities are the oldest of the state’s 15 public institutions, with an average building age of 23 years in 2022 (most recently available data). Additionally, Virginia State staff indicated in the most recent academic year, they housed some students at a hotel in Petersburg and dorms on the Richard Bland College campus (at least a 15-minute bus ride from the Virginia State campus) because of lack of usable campus housing.”
Translation: Virginia State needs more funding. “Virginia State now receives among the highest general fund appropriations per student,” the report said, but might need even more. Here’s what caught my eye: “Virginia State has also found some creative solutions to reduce expenses, such as using surplus residential furniture from GMU to furnish new residential spaces in 2023.” That’s great that two schools could cooperate and save taxpayers money, but is it a good look if one of the state’s oldest universities, and one of its two historically Black public colleges (Norfolk State is the other), has to depend on hand-me-downs?
Virginia State did not file a formal response to the report.
Mary Washington is flagged as being at ‘substantial or extreme’ risk in three categories
Those three: pricing power, facility age/condition and financial ratios. It’s also rated as being at “moderate” risk on enrollment. This is more flags than Radford and Virginia State put together. “Collectively, these substantial and moderate risk factors would make Mary Washington especially vulnerable if there were to be sudden, further reductions in enrollment or funding,” the report said.
The enrollment decline seems straightforward enough, although, as with Radford, the report doesn’t delve into why enrollment is declining there and not elsewhere. According to SCHEV, Mary Washington’s enrollment peaked at 5,380 in 2009 and was down to 3,757 in 2022, before rising to 3,808 last year.
“In hopes of mitigating its enrollment decline, Mary Washington heavily discounted tuition and fees for several years,” the report said. “This heavy discounting weakened the institution’s pricing power in the higher education market for students. Mary Washington believed that if not enough students were willing to pay its tuition and fees, it needed to reduce them to entice more students to enroll. Though the discounting strategy may have helped stem enrollment loss, it reduced Mary Washington’s total revenue.” That’s forced the school to cut costs, the report said, and it has reduced staffing 20% since 2017, “primarily through attrition.”
Meanwhile, “the age and condition of Mary Washington’s campus facilities also complicate the school’s efforts to recruit and retain students,” the report said. “Mary Washington has the second oldest campus facilities of the state’s public four-year institutions … Mary Washington recently hired a private consultant to assess its facility maintenance needs. The consultant concluded that there is a substantial amount of need to be addressed through maintenance, repair, or renovation.” The report notes that the General Assembly has appropriated money for renovation and construction at Mary Washington but doesn’t say whether that will be enough.
In a formal response to the report, Mary Washington president Troy Paino said “UMW’s current enrollment situation is not as dire as the report suggests.” As for the school’s finances, he wrote that “it should also be remembered that Virginia’s funding formula for state aid still benefits schools that do not serve as many Pell-eligible students as UMW.”
What happens next
Well, nothing has to happen. A JLARC recommendation is just that — a recommendation. The legislature, in its collective wisdom, often ignores lots of JLARC recommendations. In this case, the agency recommends the schools it cited “proactively develop plans and take actions to address their specific viability risks.”
Will this report crystallize a lot of legislative concerns and lead to action, whatever that action might be? Or will this report go onto a shelf to be forgotten as many others have been? There’s no way to know. However, we do know that enrollment is about to fall. Legislative reports may not be destiny, but demography is.