William & Mary’s Board of Visitors today approved “The William & Mary Promise,” a new operating model that provides vitally needed resources to secure the future of Virginia’s distinctive “public ivy” while markedly enhancing affordability and access for Virginia students. Highlights of the new model include:
- FOUR-YEAR TUITION GUARANTEE: Provides Virginia families with financial predictability through a commitment to incoming in-state students that tuition will remain constant through all four years of undergraduate study.
- RELIEF FOR “MIDDLE-INCOME” FAMILIES: Reduces the “net tuition” paid by middle-income families, as defined by the state’s Higher Education Advisory Committee. More than 70% of Virginia households qualify as “middle income” under that definition and would pay the same or less to attend William & Mary under the new model.
- LESS DEBT FOR W&M GRADUATES: Reduces by up to $8,000 the loan burden for middle-income in-state undergraduate students who have demonstrated financial need.
- TUITION CAPPED AT C.P.I. FOR RETURNING VIRGINIA STUDENTS: For in-state undergraduate students enrolled at William & Mary before adoption of the new model, holds annual tuition increases to no greater than the rate of inflation (annual change in the Consumer Price Index, 1.8% next year).
- ADDITIONAL VIRGINIA STUDENTS: Provides for 150 additional in-state students to be enrolled to William & Mary over the next four years, which combined with the recent commitment of 150 in-state students represents an 8% increase since 2010.
- ENSURING ACADEMIC EXCELLENCE: Increases faculty compensation (based on merit) to the level recommended in the state’s new landmark higher education law (TJ21), keeps classes small and interactive, and increases average faculty engagement in instruction.
- SECURING A “PUBLIC IVY” FUTURE: Ensures a sound financial future for the College through innovation, enhanced efficiency and productivity, greater philanthropic support, and increased tuition revenues.
“William & Mary is a treasure for the Commonwealth and the country,” said President Taylor Reveley. “It is one of the greatest liberal arts universities in the world, rare for its genuine commitment to both research and teaching and for its abiding emphasis on undergraduate education of compelling quality. To sustain this treasure and enable it to move forward in this century, we must take action on many fronts. Those of us on campus must keep seeking ways to provide superior results at less cost. Our alumni and friends must help sustain William & Mary with increasing generosity through annual giving, endowment gifts, and funds for bricks and mortar. Our students and their families must help support more of the cost of the ‘hands on’ education that is the glory of the College. At the same time, we must become more affordable for Virginia low- and middle-income families and reduce student loan debt. With all of us doing our parts, William & Mary can continue to contribute magnificently to the Commonwealth and nation. Our new operating model is a vital step to that end.”
The Board of Visitors adopted the “William & Mary Promise” to fund expenditures in the university’s approved six-year plan and to address priorities identified in the Higher Education Opportunity Act of 2011 (TJ21), which the General Assembly adopted unanimously two years ago. The plan takes into account that long-term declines in state support require a new financial model to meet the university’s essential needs. The plan will make the College more self-sufficient during uncertain economic times and will provide the stable funding necessary to offer one of the best undergraduate educations in the country and to be recognized internationally for academic excellence. Resources generated by the plan will be used to retain and attract the outstanding faculty and staff necessary to deliver “public ivy” quality, enhance affordability for low- and middle-income Virginia students, and provide more opportunities for in-state students to attend William & Mary.
“With the steep decline in public funding for higher education over the last generation, and the uncertainty of such funding in the future, it is time for bold and creative ideas to provide the kind of resources needed to sustain great institutions like William & Mary, while also improving affordability for students with financial need and predictability about tuition amounts for everyone,” said W&M Chancellor Robert M. Gates. “I am fully supportive of what is proposed and believe it places the College on much more solid footing for the future.”
Rector Jeffrey B. Trammell praised the collaboration and creativity that led to the William & Mary Promise.
“The board, administration and university community came together to craft and refine this new operating model. William & Mary is committed to providing the best undergraduate liberal arts education of any public university and securing a future worthy of our past,” Trammell said. “The William & Mary Promise is a visionary plan that increases affordability for lower- and middle-income Virginia families. It enables more Virginians to be educated at the College. It allows us to retain and recruit the very best faculty and staff. And it provides an innovative, predictable tuition model for in-state students. The reinvention of our operating model allows us to enhance and sustain William & Mary's national preeminence and promises that the fourth century will be the best yet for our 320-year-old institution."
Todd Stottlemyer, chair of the Board’s Committee on Financial Affairs, said the new operating model is a promise to everyone associated with William & Mary.
“This is an innovative plan to preserve and strengthen the university’s long-term excellence,” Stottlemyer said. “In the face of growing competitive pressures and limited public funding, William & Mary will become more self-sufficient so it can continue to offer an outstanding educational experience as one of the leading institutions of higher education in the Commonwealth and nation. Because of William & Mary’s strong position in the higher education marketplace, the College is able to implement a financial model that simultaneously lays a firm foundation for its future as a leading American university and enhances affordability for middle-income students from Virginia.”
Additional information on key features of the William & Mary Promise follows:
Four-year tuition guarantee:
- Beginning this fall, entering Virginia students will know exactly what their tuition costs will be for all four years at William & Mary, and those costs will not rise from year to year. The Board’s action today sets tuition for classes entering in the fall of 2013, 2014 and 2015. Virginia undergraduate students in each entering class will see a one-time step increase their freshman year: to $10,428 for the 2013-14 academic year, $12,428 for 2014-2015, and $13,978 for 2015-2016. For each entering class, tuition will be frozen at that level for all four years.
- To put the new tuition model in perspective, the cumulative four-year cost of tuition for the class that enters in fall 2013 will be less than it would have been under the annual 7.1 percent increases that were the average at William & Mary over the past five years.
- The William & Mary Promise ensures that all Virginia students, regardless of income or financial aid eligibility, will continue to receive a “public ivy” education at William & Mary for less than it actually costs the College to provide that education. Even after the step increases in tuition described above are fully implemented, William & Mary as a public university will still be subsidizing the education of all in-state students, even those whose family incomes and assets make them ineligible for any financial aid. Under the William & Mary Promise, however, “middle-income” families will receive a larger share of this subsidy than under the current model. When the effects of increased financial aid are factored in, the "net tuition" paid by the majority of students who qualify for financial aid will be significantly lower.
- The new tuition rates and four-year guarantee are for new in-state students only. Currently enrolled in-state students will see their tuition increase no greater than the rate of inflation (Consumer Price Index, or CPI), which means an increase of just 1.8 percent for the 2013-14 academic year – the lowest in-state increase for current students in more than a decade. Tuition increases for these returning students in fall 2014 and 2015 will also be based on increases in the CPI.
- The guaranteed tuition plan will not apply to out-of-state undergraduates. But out-of-state students will have a 3% tuition increase for fall 2013, the lowest increase in 11 years. The College will continue to evaluate out-of-state tuition on an annual basis, considering total costs as well as tuition and fees.
Middle-income affordability and lower student debt:
- Under the William & Mary Promise, students from middle-income families who qualify for need-based financial aid will pay no more “net tuition” (tuition less financial aid) than under the current model, and the vast majority will pay significantly less. The new model will enable the College to increase the amount of need-based financial aid it provides to in-state students by 50 percent over the four-year period. Most of the increased aid will be used to provide grants in lieu of loans, thereby reducing student debt.
- Through the new financial aid, the William & Mary Promise will lower the average annual borrowing and four-year cumulative debt average for Virginia undergraduates with demonstrated need as determined by the financial aid office. The plan will lower the maximum amount of loans included with an in-state financial aid package by 36% ($2,000 annually) for families with an income between $40,000 and $60,000, and by 18% ($1,000 annually) for all other families with demonstrated financial need. Students from Virginia families with a household income of less than $40,000 will continue to receive financial aid that covers 100% of their need with grants, and thus will incur no debt.
- The definition of “middle income” used in the William & Mary Promise encompasses more than 71% of Virginia households and was supplied by the Commonwealth of Virginia pursuant to the new TJ21 legislation. Adopted by the General Assembly in 2011, TJ21 stressed the need to improve middle-income affordability and directed a newly created Higher Education Advisory Committee to provide a definition of the target group. The Committee has done so, defining “middle income” as extending to 400% of the federal “poverty” definition, or to roughly $100,000 in annual income for a family of four with two children.
More spaces for Virginia undergraduates:
- Overall in-state undergraduate enrollment will increase by an additional 150 students above current commitments, phased in over a four-year period. This is in addition to the 150 in-state slots William & Mary has been phasing in since 2010.
- When completely phased in, W&M will have added an additional 300 spots for Virginia students compared to the 2010 enrollment when the expansion began—an increase of about 8%.
Academic excellence and financial soundness:
- The William & Mary Promise is designed to achieve the objectives identified in the College’s six-year-plan, which was adopted last year after passage of the TJ21 legislation. Each fall, public institutions of higher education in Virginia are required by TJ21 to submit updated six-year plans to designated state officials. The plans identify critical needs and priorities as well as expenditures and planned resources. William & Mary’s plan, first adopted by the Board of Visitors in September 2011, was informed by both the goals of the TJ21 legislation and the ongoing strategic planning effort that began in 2008.
- A primary objective of the plan is to narrow the gap between quality and the resources the College has to sustain that quality. According to U.S. News, the gap between William & Mary’s academic quality and the university’s financial resources is unparalleled: W&M ranks 33rd in the nation in quality and 112th in resources. No other university in the top 50 has a gap anywhere close to the 79-point difference of those two rankings, and this gap has been growing significantly over the last three years.
- Retaining and attracting top faculty – the lifeblood of any great university, especially a “public ivy” – is exceptionally difficult when the resource gap becomes so wide. W&M’s faculty salaries are currently at the 14th percentile of the university’s peer institutions as identified by the State Council of Higher Education for Virginia (SCHEV), and are projected to decline to the 9th percentile by 2015 under the existing operating model. To put this in perspective, the TJ21 legislation enacted just two years ago reiterated the Commonwealth’s longstanding goal of having its colleges and universities provide faculty salaries at the 60th percentile of their SCHEV-identified peers. The William & Mary Promise will provide resources to help the College reverse the negative current trend and move, based on merit, toward the 60th percentile recommended in the TJ21 law.
- While the Governor and General Assembly in recent years commendably have halted and begun to reverse the decade-long state disinvestment in higher education documented by the Governor’s Commission on Higher Education Reform, Innovation and Investment, the uncertain economy and long-term fiscal constraints suggest that the pace of reinvestment by the Commonwealth will be limited. The new operating model thus relies on a combination of sources within the College’s control – savings from even greater productivity, efficiency, and innovation, increased private philanthropy and higher net tuition revenues – to ensure that instructional quality is preserved and enhanced while extending affordable access to many more deserving Virginia students, especially those caught in the “middle class squeeze.”