State Budget Update

Tapping a combination of federal relief funds and state revenues, Virginia legislators gave bipartisan support to notable higher education investments in 2020 and 2021.

As a result of the investments, state appropriations now cover roughly 50% of the educational cost at public higher education institutions, an increase from the prior 49% level but still short of the state’s declared policy of covering 67% of the cost. Most neighboring states continue to provide far higher per student support than Virginia provides.

The most recent actions by the General Assembly and Governor Northam, in the August 2021 special session, allocated $121 million of Virginia’s pandemic-related federal funding to higher education, including $100 million for financial aid for low- and moderate-income students attending public higher education institutions and $11 million in additional support for tuition assistance grants (TAG) at nonprofit private colleges.

State support for higher education also increased as a result of action taken during the several preceding legislative sessions that followed the pandemic outbreak in early 2020. Virginia’s colleges, universities, and community colleges experienced significantly increased costs due to the pandemic, only a portion of which were offset by federal relief funds. Legislators helped both the higher education institutions and the students and communities they serve by appropriating $372 million in additional state support for higher education in the 2020-2022 biennium, a sizeable portion of which was designated for student financial aid or allowed to be used for that purpose. Legislators in early 2021 also funded the state’s share of a 5% salary increase for faculty, adjunct faculty, and staff at public colleges and universities, and allocated $57 million in federal relief funds to higher education institutions for coronavirus testing and student financial aid.

The Commonwealth’s additional funding allocations were applauded by the Virginia Business Higher Education Council, which thanked the Governor and General Assembly for helping colleges continue to carry out their vital educational and economic missions during times of extraordinary uncertainty, risk, and cost.

Despite the much-appreciated investments in recent sessions, state support for Virginia’s higher education system remains well below the policy unanimously adopted by the General Assembly in the 2011 Top Jobs Act, which codified the goal of having state appropriations cover 2/3 of the cost of education at public higher education institutions. The State Council of Higher Education for Virginia (SCHEV) reports that the state now covers approximately half of that cost, a slight improvement over the 49% level the preceding year.

According to the most recent annual report by the State Higher Education Executive Officers Association (SHEEO), Virginia currently ranks 39th in state support of higher education. Per student support of higher education in Virginia in FY2020 was $6,519, compared to $10,969 per student in Tennessee, $10,742 per student in North Carolina, and $8,800 per student in Maryland. Virginia’s funding level also was among the lowest in the South and trailed the U.S. average ($8,636 per student) by more than $2,000 per student.

Growth4VA is a campaign of the Virginia Business Higher Education Council