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

June 26, 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 first meeting on June 26, 2009, in Richmond.

Delegate Hamilton, the joint subcommittee's chairman, called the meeting to order. Because the position of vice-chairman had become vacant, a new election was held, and Senator Ruff was elected.

Presentations

Staff Report
The joint subcommittee staff presented a review of last year's activities, including an overview of the joint resolution and the joint subcommittee's charges. Staff also went over last year's presentations by the State Council for Higher Education in Virginia, detailing current enrollment trends and projections for the future, as well as a history of the Tuition Assistance Grant (TAG) program.

Robert Lambeth, President of the Council of Independent Colleges in Virginia (CICV) spoke about the valuable role that private institutions play in the higher education system and how additional state assistance would benefit Virginia families.

Paul Baker, Vice President of College Relations and Administration at Hampden-Sydney College, and Robert Lindgren, President of Randolph-Macon College discussed their experiences in financing capital projects without state assistance. Both spoke about the difficulty in raising private funds sufficient to finance capital projects.

Robert Lambeth also provided the joint subcommittee with an overview of publicly supported programs for private institutions in other states. Mr. Lambeth pointed out that Virginia is currently one of only 11 states that does not offer a state-sponsored student loan program. Members were interested to learn this, and it was eventually added to the list of topics to be discussed this year.

Tony Maggio, House Appropriations Staff
Mr. Maggio gave a higher education budget overview. Mr. Maggio explained that higher education funding is divided into three different categories, with educational and general programs being the category most often talked about. This category includes instruction, research, and public service programs. He then explained how state funding for higher education has fluctuated over the years, depending on the economic state of the Commonwealth. He also stated that while the Joint Subcommittee for Higher Education Funding Policies was established to develop funding guidelines for public colleges and universities in 1998, because of budget reduction requirements, the guidelines were not actually used until the 2004 session. These guidelines are intended to provide an objective analysis tool for higher education funding. Mr. Maggio then gave a brief history of TAG funding, which has increased from 59% of the general fund support (per full-time enrollment) for students in four-year public institutions of higher education in 1993, to 82% in 2009.

Manju Ganeriwala, State Treasurer of Virginia
Manju Ganeriwala spoke regarding the Virginia College Building Authority. Ms. Ganeriwala first gave an overview of the history and legal structure of the Authority, with particular emphasis on the Private College Program. This program allows the Authority to act as a conduit issuer, in order to give private, nonprofit institutions access to the tax-exempt bond market. The bonds issued through this program are in no way considered obligations of the Commonwealth. She then walked the joint subcommittee through the application process. Finally, she provided the joint subcommittee with information on current outstanding bonds, totaling over $560 million.

Virginia Education Loan Program
Staff gave an historical overview of the Virginia Education Loan Program, or VELA. This program was started in 1972, in order to help Virginia students fill in any gaps in funding after existing federal resources were exhausted. In 1992, VELA was combined with the State Education Assistance Authority, the state's guarantee agency, to comprise the Virginia Student Assistance Authorities. The two authorities were governed by a single board of directors, but maintained separate fund accounting. In 1995, legislation was passed directing VELA to liquidate its assets; after a final sale in 1997 to Sallie Mae, $64 million was deposited into the General Fund.

Robert Lambeth, President, Council of Independent Colleges in Virginia
Mr. Lambeth reiterated the importance of private institutions in educating Virginia's citizens. He emphasized the cost-savings to the Commonwealth of educating students in private institutions of higher education rather than public. Mr. Lambeth again asked the joint subcommittee to consider successful programs for funding private institutions in place in other states. He asked the subcommittee to consider three separate issues in its remaining meetings:

• An increase in Tuition Assistance Grant funding, in order to attract more students to private institutions;
• Utilization of the Commonwealth's authority to contract with private institutions to provide education in specific areas at a lower cost; and
• Reinstatement of the state-run student loan program.

Next Meeting

The next meeting, to be held at 1:00 p.m. on August 17, 2009, will focus on a review of existing funding programs in other states and more information on Virginia's former student loan program. The chair asked for more information on creative ways to help fund private institutions of higher education.

Chairman:
The Hon. Phillip Hamilton

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