The University of Virginia is hoping to get more philanthropic support for its financial aid program, President Teresa A. Sullivan said.
In a recent interview, Sullivan talked about the future of AccessUVa and rising costs that could lead to further tuition increases.
In August, the university’s Board of Visitors voted to replace up to $7,000 a year in grant aid for UVa’s lowest-income students with loans. The change is supposed to rein in the growing costs of AccessUVa, which many board members saw as unsustainable.
The program’s cost to the university went from $11 million in 2004, its first year, to about $40 million last year.
Sullivan said she believes AccessUVa should be safe from further cuts, barring another financial downturn that causes student need to spike, as it did during the recession. But those things are impossible to predict, she said.
“At the time AccessUVa was begun, I don’t think anybody anticipated the growth in the need of the student body,” Sullivan said. “Nobody really foresaw the recession in 2008.”
The cut in grant aid is expected to save the university $1.5 million next year, and $6 million annually by the time it’s fully implemented in 2018.
But the adjustments to AccessUVa were designed to keep costs from growing out of control, said university spokesman McGregor McCance. That’s more important than any short-term savings associated with the plan, he said.
“Program costs will continue to rise, and the adjustments to AccessUVa will help ensure that the costs do not escalate as rapidly as they would have,” he said.
The change won’t affect current students — only the ones entering in 2014 and after. But that hasn’t stopped many students currently receiving aid from speaking out against it. One of the main complaints is that getting rid of loans will deter low-income students from attending.
“The only reason why I’m in college today is because of the full grant aid AccessUVa offered,” said Ashley Blackwell, a third-year student active in the movement to restore the program.
“If anything, I would have had to probably just start taking up jobs after high school, just to build up some kind of financial background,” she said.
Citing the low percentage of students receiving federal Pell grants — which are awarded to students from low-income backgrounds — the New America Foundation rates UVa as one of the least socioeconomically diverse public institutions in the nation.
Stephanie Montenegro Nunez, a fourth-year student and one of the organizers of the movement to restore AccessUVa, said peeling back grants will hurt the university’s efforts to recruit more students from poor backgrounds.
“It was just beginning to make a difference,” she said.
Sullivan said the program is still one of the most generous in the country. The university covers 100 percent of student costs, she said, either through grants or loans.
UVa is the latest in a series of universities that tried to implement generous policies covering all costs for low-income students with grants. The purpose of these “no-loan” policies was to keep students out of debt.
Several colleges that instituted “no-loans” policies — including Dartmouth College, Yale University, Cornell University and the Massachusetts Institute of Technology — have had to scale them back.
Mark Kantrowitz — vice president and publisher of Edvisors, a network of websites with advice on college aid and planning — said those colleges have faced similar problems. Costs skyrocketed as need went up and state and federal governments cut back their contributions to student aid, he said.
“These programs are very expensive,” Kantrowitz said. “I expect we’ll have to wait another three or four years before other colleges start new ‘no-loans’ programs.”
Kantrowitz said the programs are an important tool for keeping students out of debt and recruiting students from lower-income backgrounds. Rolling back financial aid will hurt colleges’ ability to reach those students, he said.
“If they’re trying to attract talented students, as opposed to wealthy students, it’ll hurt their goals,” he said.
Sullivan said she wants to get more philanthropic support for AccessUVa, decreasing its reliance on the university’s operating fund. The university’s endowment currently covers $9 million of the program’s costs.
Philanthropic support for AccessUVa isn’t new. The university’s previous president, John T. Casteen III, launched an effort to raise funds in 2009, as part of UVa’s recently completed $3 billion capital campaign, McCance said.
The program also will be a major focus in future university fundraising efforts, Sullivan said. She said she’s not sure how much money the campaign will bring in, but it should be enough to start an endowment that permanently supports AccessUVa.
“A lot of people received a hand-up to get through UVa,” Sullivan said. “This is a great opportunity for those people to look back and extend a hand-up to somebody else.”
After a recent Board of Visitors meeting, Sullivan tried to set an example — she donated a 2 percent pay raise the board granted her to support AccessUVa.
In the spring, the university will have to tackle another issue likely to draw attention from students — tuition. The board voted in April to increase tuition by 3.8 percent for in-state students and 4.8 percent for out-of-state students.
Sullivan said more increases are possible, especially as costs associated with the Virginia Retirement System go up.
UVa staff members are enrolled in VRS, which is funded in part by the state and in part by public employers. The state’s share has gone down since 2003, as the General Assembly sets aside less and less money for it.
The state funded 65.1 percent of the state employee plan in the last biennium. It hasn’t funded it at 100 percent since 2003.
Sullivan said she expects that trend to continue. And with UVa facing a crucial faculty hiring push, she said, tuition increases will be on the table. But Sullivan said the administration “always look[s] at everything else before tuition” as a funding option.
The students involved in the AccessUVa restoration movement said they’ll oppose any tuition increases.
“Any kind of increase in tuition is going to silence low-income students even more,” Montenegro Nunez said. “That’s not an option for us.”