VMI Eyes 3% Tuition Hike - Officials Claim Most Cadets Won't Feel It

For cadets and parents weighing whether VMI is still financially within reach, the Institute's latest budget discussion sent two messages at once: expect proposed 3% increases in tuition and fees next year, and do not assume those published increases reflect what most families will actually pay. But the March 26, 2026, Board of Visitors (BOV) Audit, Finance, and Planning Committee meeting also made clear that VMI is still trying to manage an increasing athletics-related deficit all cadets must pay towards, a shrinking auxiliary fund, and a longer-than-expected path back to stronger enrollment. VMI and the Board claim scholarships, ROTC stipends, military benefits, and financial aid absorb much of every cadet's bill. VMI's administration is counting on that premise as it pushes forward with a tuition and fee increase for fiscal year 2027 to the full BOV at its April 27 – 29, 2026, meeting. Behind that rationale lies a more complicated story: a shrinking reserve fund, a persistently deficit-ridden Division I athletics program, a BOV that is only now learning that VMI's financial recovery will take years longer than previously believed, and a potential new legislative Task Force study on as yet unsubstantiated allegations of racism, sexism, and dedication to the Lost Cause at VMI in response to the Board's decision not to renew the previous superitendent's employment contract. A work session of the VMI BOV Finance and Budget Committee convened recently to review the proposed budget assumptions for fiscal year 2027. The Meeting, led by Vice Admiral (Ret.) Terence E. McKnight, Committee Chair, and the Superintendent's staff, including Chief Financial Officer Dallas Clark and Budget Director Jeff Lawhorne, laid out a plan based on a 3% increase in in-state and out-of-state tuition, as well as auxiliary, athletic, and Unique Military Activities (UMA) fees. The committee discussion revealed financial pressures that cadets and their families should understand before the Board formally adopts the increase at its April meeting. "Very Few People Will Pay That"The administration's opening defense of the proposed increases centered on the argument that "…while there may be the initial sticker shock, one, very few people will pay that, and two, there's a lot built into that that you may not think of." Lawhorne acknowledged that for out-of-state cadets, the increase amounts to roughly $1,900 — but quickly moved to contextualize the figure. "The number of non-Virginians that will truly pay an extra $1,900 is very, very small," Lawhorne told the committee, "because of both the scholarship programs and just our own internal aid and our goals at meeting the percentages of need." Shannon Eskam added that many cadets rely on ROTC aid, GI Bill benefits, athletic aid, Call to Duty assistance, or other programs, and said VMI works with families to explain "what those financial aid awards truly mean" when comparing VMI with other schools. McKnight made the same point, saying many cadets "are not paying a lot out of pocket." Superintendent David Furness reinforced that framing, noting that ROTC scholarships — which he says also cover tuition and auxiliary fees — effectively transfer the cost of any increase to the federal government rather than to cadets. "If you're in an ROTC scholarship or all these scholarships, you're paying that fee," Furness said. "That's part of the scholarship, that's part of the federal assistance. So it's a way to put more money in the coffers." Board member Teddy Gottwald added a detail: of the approximately 80 cadets who do pay full tuition, at least 30 are international students from Thailand and Taiwan. "There's not a whole lot of out-of-state CONUS-based U.S. citizens, or in-state, that pay full freight at all here," Gottwald said. For families not covered by scholarships or aid, however, any increase is real. According to Lawhorne, "…we [VMI] meet 100% of the demonstrated need of Virginia cadets. So a cadet whose financial situation does not change from one year to the next, much of that will be covered by financial aid." VMI meets 100% of demonstrated financial need for Virginia residents and 60% for out-of-state students — but families whose financial circumstances change between years or who fall outside aid thresholds will absorb the full impact of the increase. The Athletics Deficit That Won't Go AwayOne of the most persistent line items driving the budget discussion is VMI's NCAA Division I athletic program, which continues to operate at a significant deficit. The athletics shortfall — projected at approximately $2 million in the current budget — is covered by the auxiliary fund, the same reserve that pays for housing, dining, laundry, and other cadet services. Lawhorne confirmed the dynamic and that direct tie between the proposed 3% increase and that problem: "That entire $2 million would have to come from auxiliary because that's really our only source to make up for any athletic deficit." That point matters to all cadets and families, not only athletes. The proposed increase includes athletic fees for the broader student body, and Lt. Gen. (Ret.) Furness explicitly backed that approach. He said VMI "need[s] to look at athletic fees," adding that for cadets on ROTC and similar scholarships, "you're paying that fee" through federal assistance and other aid. In other words, one of the Institute's main proposed solutions to the NCAA athletics deficit is to keep charging all cadets more, even as board members acknowledged that the reserve fund cannot continue to cover the gap indefinitely. McKnight closed the session with a candid appeal to bring in more donor funds specifically for NCAA Division I athletics: "We talk about that athletic budget. If some people can write some checks, we can reduce that athletic budget down." Using donations to solve the deficit is not a new concept over the past five years. McKnight opened the Meeting, urging committee members to support "Compete to Win," an ongoing fundraising campaign approaching $275,000, and explicitly linked it to the athletic budget problem. Quietly Draining a Reserve FundPerhaps the most consequential revelation of the meeting concerned the auxiliary fund balance—the institutional savings account that backstops deficit spending. Lawhorne estimated the fund will close the current fiscal year at approximately $11 to $12 million. If the projected $2 million deficit materializes as presented, the fund could fall to roughly $10 million by the end of fiscal year 2027. Analysis of the VMI Auxiliary Fund Balance over time using data from officially published Operating Budgets. "We really don't want to go much below that," Lawhorne said. "It is definitely taking us nearer the bottom." Gottwald responded: "The fund balance, the reserve, is not healthy. It's not in a bad place now, but it's unsustainable to keep using that as a source of filling the gap." He told the committee directly that he did not want to see a budget presented in April that still carries a $2 million deficit: "I don't think we can afford that." For families, that matters because it suggests VMI may not simply grow its way out of current budget stress anytime soon, with tuition and fee increases and a greater emphasis on donations to fund NCAA programs, rather than financial efficiencies, remaining the strategy. Board member Kate Todd echoed the concern and made a pointed request — that VMI provide historical data on the fund balance so the Board could better understand the duration and depth of the reserve erosion. Clark agreed to include that trend data in the April read-ahead materials, an acknowledgment that the Board has been evaluating VMI's finances without full visibility into its own reserve history. Publicly available VMI records show the auxiliary fund balance as of June 30, 2020, the last year of Gen. Peay's tenure as Superintendent, was $18,144,016. VMI ceased publishing the exact figures under the subsequent administration, but Lawhorne's estimate would mean the fund dropped approximately $7 to $8 million in the last four years, when it remained stable or increased in previous years. A Recovery Timeline That Just Got LongerThe Meeting produced another disclosure. For years, the Board operated under the assumption that enrollment growth would carry VMI back to its 2020 pre-decline financial footing within a few years. The projections presented at this session told a different story. Using new cadet classes of 480 in 2027, 490 in 2028, and 500 in both 2029 and 2030, Lawhorne projected that VMI's fall enrollment census would not return to approximately 1,646 cadets — comparable to fiscal year 2022 levels — until 2030. Gottwald responded: "This is new information. We've been looking at a recovery back to the '22-type numbers being a lot sooner than 2030, I'm pretty sure." Clark confirmed the Board's understanding had been outdated: "We had projected larger corps sizes, and really, it was this fiscal year '27 that was going to be... we thought we'd be a lot closer at that time. But we haven't had the enrollment numbers to really sustain that, so that has moved to the right." Gottwald offered the committee the observation: "That changes the view on, for the Board anyway, of growing out of financial difficulties. We need to factor that into our thinking." Average Rat enrollment 2010 - 2024 The concerns raised by Gottwald and Todd are in line with an independent analysis of spending trends, admissions, enrollment, athletics, tuition, the state budget, political impact, and other factors offered over the past several years to the Board but not accepted by it. That computer-assisted analysis continues to indicate that VMI will reach a crisis level in 3 to 5 years. The shift in VMI's recovery from 2027 to 2030 now falls within that model and analysis. The Donation Strategy and Its LimitsThroughout the meeting, VMI's leadership repeatedly returned to philanthropic revenue as the primary solution to financial stress. It cited fundraising campaigns, alumni donations, and restricted gifts from the Keydet Club and the Alumni Agencies Board as tools deployed to offset the athletic deficit and supplement operating budgets. But as Lawhorn noted, most restricted local funds "cannot be used for athletics" — a constraint that limits the flexibility of deploying donated dollars. Furness committed to working with Clark before the April meeting to present the Board with scenario budgets — labeled A, B, and C — showing different combinations of cuts and revenue increases to reduce or eliminate the projected deficit. "It's probably gonna be a combination of cut and revenue increases," Furness said. Whether that work will produce a balanced budget or simply a smaller deficit remains to be seen. What Cadets, Alumni, and Families Should Watch ForSeveral additional issues raised in the session are worth tracking before the April board meeting: The state budget is unresolved. Virginia's General Assembly has not finalized its budget, with the House and Senate at odds over salary increases and other items. VMI has budgeted assuming a 3% increase in employee salaries, but the final figure — and how much the state will reimburse — is not yet known. A 40% state reimbursement rate means VMI absorbs most of any mandated wage increase internally. The General Assembly will reconvene on April 22 with the BOV meeting scheduled for April 27 – 29. The final state budget negotiations may not be complete in time for the BOV. Enrollment remains the linchpin. With the small Class of 2026 now graduated, VMI hopes to replace it with a class closer to 500. Current reservations briefed th the meeting stand at 355 partial and full reservations for the future class of 2027+3, the new recovery target. Although ahead of historical pace, VMI leadership acknowledged that "summer melt" — candidates who withdraw before matriculation — typically removes around 50 from that number. The Center for Leadership and Ethics (CLE) Phase Two may not be funded. The state Senate backs the the CLE's second phase but not the House of Delegates. Its exclusion from the final budget would affect programming and potentially staffing. The tuition comparison also excludes VMI's annual quartermaster fee for Laundry, Haircuts, Uniforms, and Unique Military Activities (UMA), which is approximately $3,600 according to the VMI website. When VMI benchmarks its tuition against peer institutions, it removes the quartermaster charge from the comparison because, as Lawhorne stated, "…certainly none of the other civilian schools would charge anything close to that, and they wouldn't provide those services." The administration argues that this is appropriate when comparing the cost-effectiveness of VMI with that of other schools. Families should be aware that the published comparison figures understate VMI's total mandatory cost relative to a civilian school's out-of-pocket total. The April BOV meeting is where these assumptions become decisions. Families with cadets currently enrolled — or considering VMI — would be well served to review the read-ahead materials when they are released and to understand that the financial pressures shaping this budget will not resolve themselves quickly. By VMI's own projections, the Institute will not grow its way back to a stable footing until the end of the decade. What is your opinion? Make your views known to the BOV before the vote via The Cadet Foundation's Action Dashboard at www.thecadetfoundation.org/action. Please consider supporting our work at: www.cadetnewspaper.com. The Cadet is 100% dependant on donations and advertising.