Last year, Virginia’s state department of higher education approved a new funding formula that determined how financial aid dollars are allocated to colleges. Lawmakers also approved $300,000 for an additional study of other higher education funding allocations. But due to the pandemic, that funding was pulled.
The funding was re-allocated during the 2021 session, and the National Center for Higher Education Management Systems has been selected to work with the State Council of Higher Education for Virginia on the study. The plan is to study higher education funding through a lens of equity and fairness.
“This cost study is looking at all of the finances that support higher education in Virginia,” said Tom Allison, senior associate for finance and innovation at SCHEV. “Financial aid is one slice of a much larger pie.”
Wendy Kang, SCHEV’s director of finance policy, says a primary focus of the new study is in education and general, or E&G. About 64% of E&G funds go to staff salaries.
“That's really the instruction side, students support services, the administration component,” Kang said. “Aspects related to the administration of financial aid, provosts and deans and presidents and all of that administration component, and a couple of other areas.”
Right now, funding is distributed to schools in part by how many full-time students are enrolled. But experts like Dominique Baker, a professor of education policy at Southern Methodist University, say that’s not the best measure – and can disadvantage schools who enroll mostly part-time students.
“I generally prefer looking at the total number of students, because part-time students are still full human beings,” Baker said. SCHEV staff say that’s just one thing they’d like to look into.
“That’s why we want to relook at all of that, because maybe it needs to be more reflective of the type of students that are being served not just the [full-time enrolled students] but the headcount,” Kang said. “Reassessing costs, and getting a basic consensus or understanding of costs is an important factor to us because it's hard to create buy-in for investments if people think the cost is too high.”
Virginia’s Higher Education Opportunity Act of 2011 tried to increase equity in school funding. But Baker says you can’t talk about fairness and equity without talking about the historical underfunding of historically Black institutions across the country.
“If you want to have serious conversations about like, ‘Oh, we want to value our HBCUs, we want to value our community colleges the same way that we value our regional public institutions, the same way that we value these flagship public institutions,’ then I think you have to look and say, ‘This is the amount of money we should have been giving you. And that's what we're going to make sure we give you now,’” Baker said.
A preliminary report on a new higher education funding formula is due in December, and a final report due next July.
