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VCU Meets Supply and Demand

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Surely Virginia Commonwealth University has an economics department. Surely, there is someone at the state’s largest institution of higher learning who is conversant with the law of supply and demand. But, then, maybe not…

The VCU Board of Visitors will be asked to increase tuition 3.5% next academic year and pay a new $50 library charge, according to the Times-Dispatch. The cost of room, board and parking will increase as well. The proposal, notes Karin Kapsedelis, comes “amid concerns over loss of revenue from declining enrollment.” The university expects to see enrollment drop from 31,288 students this year to 30,962 — about 1,000 fewer than had been projected.

University administrators proffered a number of explanations for the decline in enrollment, but none of them involved price. Let me help: One big reason enrollment is dropping is that you charge too much! Jacking up tuition again will not help.

Like other state universities, VCU has ratcheted up tuition, fees and other charges by two to three percentage points faster than the inflation rate for many, many years, even as most Virginians’ incomes remain flat. Over time, those charges add up. It doesn’t help that the population of college-age students is peaking after years of growth, nor that distance learning is becoming an increasingly viable alternative to traditional classroom education, nor that an increasing number of Americans are questioning whether the cost of attending college is worth the pay-off.

While a 3.5% increase doesn’t sound like much, it exceeds inflation, which has been running somewhere between 1.0% and 2.0% over the past year, and it comes on top of an aggressive tuition restructuring that jacked up in-state charges by 4.2% on average and out-of-state charges by 2.14%.

While VCU does have undisputed centers of excellence, and while it has undeniably made a tremendous contribution to the revitalization of downtown Richmond, it is still a middle-of-the-pack state university. It is in serious danger of pricing itself out of the market.

(This article first ran in Bacon’s Rebellion on April 8, 2014)

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