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
November 16, 2009
The joint subcommittee met in Richmond with Senator Frank
M. Ruff, Jr., the joint subcommittee's vice-chairman, presiding. The purpose
of the final meeting was to consider and discuss potential final recommendations.
Potential Final Recommendations
student loan program
potential legislative proposal would create an updated or "hybrid"
Virginia Education Loan Authority (VELA), or could involve Virginia buying
into an existing program in another state. The hybrid program would offer
federal and alternative loans to students attending Virginia institutions
of higher education. A guaranty fund would be created to cover losses
and the program would be authorized to accept federal, state, or private
would provide direct support for institutions, or create a fund from which
projects can be chosen, based on criteria set by the state. This could
be structured similar to Maryland or New York's current program. Maryland's
program provides for coordinated budget requests through an independent
college authority. The proposed projects must meet certain higher education
goals set by the state of Maryland in order to be considered and a 1:1
match by the institution is required. In 2010 three member institutions
are to receive $9 million. New York's program provides for a state contribution
of one dollar of support for every three dollars spent by the independent
college. Grants are awarded by the Higher Education Capital Matching Grant
Board consisting of three members, and as of August 6th, 2009, 48 capital
projects at 39 colleges had been approved for 2009-2010.
Based on Mr.
Pope's presentation in August 2009, the Commonwealth could lend its credit
through a program similar to the Virginia Resources Authority (VRA), as
well as set up incentive grants for preferred projects to lower borrowing
costs for private colleges. The credit enhancement program would be a
little stronger than the Virginia College Building Authority, currently
available to nonprofit institutions, as it would allow private colleges
to take advantage of bond financing at very affordable low interest rates,
through the Commonwealth's subject-to-appropriation undertaking to provide
funds necessary to pay bonds if, and only if, the basic payment sources
are inadequate. The subject-to-appropriation language provides the necessary
assurance to national ratings agencies that the bonds will be paid, but
legislation would need to impose standards that would reduce to an absolute
minimum the chances that the Commonwealth's subject-to-appropriation obligation
would ever be called on. In addition, incentive grants could be utilized
to promote capital projects, increase enrollment of Virginia students,
or increase financial assistance to Virginia residents.
two existing programs, for teachers and nurses; these could be expanded,
or new programs added based on need.
involve an increase in the award amount or creation of a TAG website or
promotional campaign. The 2009-2010 award amounts provide $3,200/year
for undergraduate students and $2,200/year for graduate students. Currently,
the award amount represents roughly 51 percent of the average state tuition
subsidy to public institutions for in-state students.
to nonprivate colleges and universities could be based on the number of
students enrolled, degrees granted, minorities or special needs students
enrolled, or the number of Virginia residents enrolled.
program for either federal or private research grants
There was little discussion regarding this item due to state budget concerns.
The joint subcommittee
voted to put forth one legislative recommendation during the 2010 Regular
Session of the General Assembly. The recommendation would create a credit
enhancement program modeled after the VRA to allow the nonprofit private
institutions to take advantage of the Commonwealth's credit rating in
obtaining bond financing. The program would impose a moral obligation
on the Commonwealth to step in if a private college or university defaults
at any time. The members emphasized that strict criteria should be imposed
in order for a private institution to be eligible to participate and to
further minimize risk to the Commonwealth.
In addition, lengthy
discussion established the desire of the joint subcommittee to include
language in the final report that is supportive of several of the other
proposed recommendations for which the current economic conditions in
the Commonwealth make implementation difficult. An executive summary of
the joint subcommittee's findings and recommendations will be submitted
no later than the first day of the 2010 Regular Session of the General
Assembly and a final report will be submitted to the General Assembly
and to the Governor in 2010.
The Hon. Phillip
Nicole Cheuk, DLS Staff
of Legislative Services > Legislative
Record > 2009