JLARC Report
4:33 pm
Mon September 9, 2013

Cost Drivers in Higher Education

Concerns that skyrocketing costs may be driving many Virginia families away from higher education prompted state lawmakers to mandate a study to discover which factors are making tuition and fees so expensive.

In its second in a series of reports, the Joint Legislative Audit and Review Commission broke down the costs of non-academic university services, including athletics, recreation centers, housing, and dining. 

As Virginia Public Radio’s Anne Marie Morgan reports, it found that these “auxiliary enterprises” are one of the major cost drivers.

JLARC Project Leader Walt Smiley said nonacademic services are supported by mandatory fees, which students pay whether they use them or not.

“Growth in auxiliary enterprise spending was substantial over the past decade.  In fact, it was the largest driver of overall spending," said Smiley.
 
On average, 12 percent of fees and tuition goes to athletic programs, and most do NOT generate enough revenue to cover expenses. Thus, they depend on fees for subsidies.  Smiley said decisions to enroll in different athletic leagues also have driven up costs, including for athletic scholarships. But Senator Tommy Norment said people go to college to get an education, and the findings show a need for reform.
 
“The reoccurring theme has been ‘access and affordability.’  There has not been a third ‘A’ in there for athletics.  It’s been ‘access and affordability’ to turn out students, you know, who can compete in a global market," said Norment.

Housing and dining account for nearly half the cost for residential students.  And students pay most of the debt service for $3.5 billion in bonds—for more than 200 non-academic projects in the last decade.