Rising Tuition: UVA as a Case Study

I found this chart on the University of Virginia website, which charts UVa Law tuition over the last 20 years:

This isn't news to anyone who pays attention to law school tuition figures, but I wanted to use it as a starting point to make a simple point: the nationwide rise in tuition rates has NOTHING to do with either (a) rising costs at the Universities or (b) a drop in funding, both of which are reasons I've seen advanced on websites defending higher tuition.

In adjusted 2010 dollars, Virginia's in-state tuition in 1990 would be about $7,700. Out-of-state tuition would be about $17,500. Consequently, the increase in law tuition independent of standard inflation is around 5.03 times for in-state and 4.34 times for out-of-state. Health care costs have simply not increased that much in the last 20 years (as an example, private insurer costs to cover cancer were "only" 137% higher in 2007 than they were in 1987).

More specifically, you can see the relative out-of-whackness of law school tuition if you look at the University of Virginia's budgets. Unfortunately, I cannot find a 1990 operating budget for UVA. But I did find the 2000 budget and the 2010 budget. Some brief comparisons are in order, I believe.

Overall Total Expenditures, 2000: 752 M (in 2010 dollars, 967 M)
Overall Total Expenditures, 2010: 1,326 M
Increase in 2010 dollars: 27%

Student Health Expenditures, 2000: 6.684 M (in 2010 dollars, 8.60 M)
Student Health Expenditures, 2010: 9.507 M
Increase in 2010 dollars: 10.5%

Expenditures on Direct Instruction, 2000: 213.40 M (in 2010 dollars, 274.59 M)
Expenditures on Direct Instruction, 2010: 335.33 M
Increase in 2010 dollars: 22.12%

Revenues from Law School Tuition, 2000: 20.5 M (in 2010 dollars, 26.37 M)
Revenues from Law School Tuition, 2010: 47.6 M
Increase in 2010 dollars: 80.5%

% of Academic Division Operating Funds From General Endowment, 2000: ~15%
% of Academic Division Operating Funds From General Endowment, 2010: ~10%

This last one becomes interesting when you consider that in 1990, the University of Virginia's endowment was $488 million ($844 million in 2010 dollars). In 2009, thanks to a two decades concerted effort (see previous link), Virginia's endowment had risen to $3.58 billion. That is a 324% increase in the real value of their endowment.

Granted, various endowment funds have strings attached, but it should be plainly obvious that there is no outside funding problem at the University of Virginia. Although funds from the state may be more restricted than they used to be, they haven't been decreased enough to require an 80% increase in tuition rates for law students, and one of the driving political motivations for cutting funding at rich public universities is because, well, they're rich. Only 8% of UVa's funding comes from the state.

I readily concede that the numbers herein may not be precise, or the mathematical ability behind their use sound (this should be obvious, as I chose law). I also concede that university budgets are ridiculously complex; I tried to be careful to pick things that would be comparable between the two budgets, but I recognize that might not always produce the best picture.

But even if I am wildly inaccurate on the figures, a few things are obvious to me from perusing the tuition rates and the various budgets:

• Law tuition revenues and rates at UVa have risen at a much higher rate than the university's expenditures.
• There has been no cataclysmic increase in the University's expenditures for health care, technology, or other things tuition defenders often throw out.
• The University's endowment has skyrocketed while the University's willingness to fund general academic projects from that endowment (or their reliance on that endowment) has dropped as the University has actively sought to grow its institutional wealth.

Far from Thomas Jefferson's ideals, the UVa appears more concerned with ballooning its endowment than providing a place for students to pursue knowledge. Its choice to raise law tuition rates 5-fold from 1990 had nothing to do with rising health benefit costs or any drop in funding. It is plainly obvious that places like UVa are no longer educational institutions, but instead complex businesses whose sole purpose is to put more coins in the piggy bank.

Inflation adjustments made using Tom's Inflation Calculator.