HJR 91: Joint Subcommittee Studying Ways in which the Commonwealth May Work More Closely with Virginia's Private, Nonprofit Colleges to Meet State Higher Education Needs

August 17, 2009

The Joint Subcommittee Studying Ways in which the Commonwealth May Work More Closely with Virginia's Private, Nonprofit Colleges to Meet State Higher Education Needs held its second meeting of the interim in Richmond.

Presentations

Eugene Cattie, Independent Consultant
Mr. Cattie gave an overview of the former Virginia Education Loan Authority (VELA), along with suggestions for how to create a new state student loan program more in line with current lending practices. Mr. Cattie explained the struggles many families face in trying to finance higher education. He offered three possible solutions:

• Create a hybrid VELA to offer alternative and federal loans to Virginia residents.
• Partner with another state that already has such a program, to offer loans to Virginia residents.
• Do nothing and let the schools find their own solutions.

He then went through the pros and cons of each option.

Joint subcommittee members expressed some interest in the first option, creating a hybrid VELA, and asked for details as to how such a program could be implemented. Mr. Cattie indicated that a program could be established in less than a year, with as little as $5 million for the guarantee fund.

Robert Dean Pope, Hunton and Williams
Mr. Pope gave suggestions on ways in which the Commonwealth could help private institutions finance capital projects. Mr. Pope suggested a two-pronged approach: first, the Commonwealth could offer a form of credit enhancement modeled after the Virginia Resources Authority, and second, the Commonwealth could offer selective incentive grants. Together, he believes these two measures could have a profound effect on private institutions' ability to finance capital projects.

Staff Presentation
Staff gave a summary of a presentation given last year by Robert Lambeth, President of the Council for Independent Colleges in Virginia, detailing programs in other states that provide financial support to private institutions. Staff reviewed the capital funding programs in Maryland and New York, and briefly reminded the joint subcommittee members of other types of existing funding programs, such as the per capita funding available in New Jersey, Pennsylvania, and Maryland, and the shortage area programs in Illinois and Maryland.

Next Meeting

The joint subcommittee members agreed that the next and final meeting should focus on what recommendations, if any, the joint subcommittee will make. The chairman directed staff to prepare a list of ideas discussed throughout the course of the study, along with any suggestions submitted by joint subcommittee members, to be distributed in advance of the final meeting. The final meeting is scheduled for November 16, at 10:00 am, where the members will discuss and vote on any recommendations they wish to put forward.

Chairman:
The Hon. Phillip Hamilton

For information, contact:
Jessica Eades, Nicole Cheuk, DLS Staff