Some Virginia universities are at "some" financial risk of future closure
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Declining enrollment has put three Virginia universities at "some risk" of not being able to operate in the future, according to a new report from the state's watchdog agency.
Why it matters: Those schools — Mary Washington, Radford and Virginia State — should be monitored closely for the next few years and possibly consider operational changes, the General Assembly's Joint Legislative Audit and Review Commission wrote in its report.
- Worth noting: All three schools responded to the report saying they'd already started making changes to address the issues.
The big picture: Higher education institutions everywhere are facing an "enrollment cliff" due to years of declining birth rates and shifting attitudes about college, which will mean fewer students looking for post-high school education.
- The cliff is expected to begin next year.
- As a result, JLARC reviewed the viability of the state's 15 public four-year universities.
What they found: Eight of Virginia's public universities are doing just fine financially, but seven — Christopher Newport, Longwood, Norfolk State, UVA at Wise, Mary Washington, Radford and VSU — have "at least one risk factor" that should be monitored.
- Those last three have the highest risk of any of the state's schools, though none are in danger of immediate closure and each is currently working to address their risk factors, JLARC noted.
Radford
Radford's challenge is enrollment, especially worrying since tuition and fees account for a major portion of any school's bottom line, JLARC said.
- The school has lost more students on a percentage basis than any other in Virginia, dropping by more than 25% in the last decade. Its loss of freshmen is even more pronounced, down by 38% in 10 years.
- Yes, but: Radford president Bret Danilowicz responded to the report, saying enrollment stabilization was his top priority when he took over in July 2022. And the school is gaining traction: Radford enrolled 1,414 freshmen this fall, its largest class since 2019 and up from 1,100 last year, and it added 723 transfer students, the most in more than a decade, the school said.
Mary Washington
Mary Washington has also experienced enrollment declines, going from enrolling 870 freshmen in 2014 to 762 last year, per data from the State Council of Higher Education for Virginia.
- But the biggest threat to its financial future is that it for years offered "heavily discounted" tuition. Also, it has numerous aging campus buildings in need of "substantial maintenance," JLARC found.
- But but but: The school has scaled back on those tuition discounts and amassed $200 million in capital funding for building improvements, Virginia Business reported.
Virginia State University
The HBCU along the Chesterfield-Petersburg line has been steadily growing its enrollment over the last decade, going from 921 freshmen in 2014 to 1,454 last year.
- VSU, however, has the highest percentage of Pell grant students in the state — more than 70% of its students — and therefore its per-student tuition revenue has dropped by 26% when adjusted for inflation since 2015. It too has older buildings that need maintenance, another issue contributing to its "some risk" status, JLARC found.
- Yes, but: VSU, which as an HBCU has been historically underfunded, says it's counting on continued increased support from the state and federal government to help offset its financial challenges.
- "We recognize that while our tuition cost has lowered our tuition revenue, it has increased access and contributed significantly to upward mobility and a more diverse workforce in the Commonwealth," VSU president Makola M. Abdullah said in a statement.
What's next: JLARC recommends the state's higher education review committee keep monitoring the seven schools with risk factors over the next few years.
- Plus, it proposed that SCHEV streamline its process for reviewing schools' new academic program proposals to allow universities to be more nimble. SCHEV is already considering the change, per Virginia Business.