The Board of Visitors on Saturday received a progress report on plans to develop a new comprehensive funding model that will ensure the University of Virginia’s commitment to providing an exceptional and affordable education to any qualified student, regardless of financial need, thus ensuring U.Va.’s standing as one of the premier public universities in the nation.
The board’s finance subcommittee presented a summary of its deliberations regarding a comprehensive review of funding requirements for strategic priorities, including the impending generational turnover of faculty; implementing the University’s strategic plan, the Cornerstone Plan; enhancing access and affordability; and sustaining excellence in operational performance.
In June, Rector George Keith Martin charged the subcommittee with developing a financial model that promotes affordability for low- and middle-income students and their families; predictability of tuition and fees and associated financial aid; a sustainable student financial aid program; sustainable funding for instruction that preserves and enhances academic excellence, diversity and inclusiveness; and process efficiencies and savings achieved through the University’s “Organizational Excellence” initiative.
The subcommittee’s effort in developing an “Affordable Excellence” framework represents an important step forward, with a comprehensive look at the requirements to further excellence at the University by:
- Addressing the generational turnover of faculty;
- Funding the University’s strategic plan, the Cornerstone Plan;
- Improving affordability; and,
- Developing the basis for a long-term financial model
The new framework seeks to ensure that a U.Va. education remains affordable and accessible by identifying the financial resources necessary to further enhance and sustain the University’s financial aid program.
“The proposed framework reflects our commitment to providing the highest-quality education to future generations of students and their families, and further underscores our commitment to support the commonwealth’s higher education mission to educate more students while also maintaining our commitment to a robust financial aid program,” said board member Frank Atkinson, a member of the finance subcommittee. “We believe this framework will not only sustain our ability to provide a high-quality education, but will also allow the University to be affordable to more Virginians.”
The University anticipates hiring 572 tenure-track faculty members, 105 of whom will fill new positions in mission-critical areas identified within the strategic plan and help meet increased enrollment projections.
During the presentation, U.Va. President Teresa A. Sullivan underscored the importance of recruiting and retaining a distinguished faculty.
“This is our once-in-a-generation opportunity to shape the University’s faculty for its third century,” Sullivan said. “When Thomas Jefferson recruited the first faculty to U.Va., he sought ‘none but of the highest grade.’ Our standards now are as high as Mr. Jefferson’s then, and U.Va.’s future eminence depends on our commitment to that high standard.”
The cost of implementing the Cornerstone Plan is estimated at more than $162 million over the course of the next seven years, and the amount needed to adequately address anticipated faculty hiring is estimated to be more than $327 million over the same period of time. The combined seven-year cost of $489 million represents less than 5 percent of the expected total Academic Division expenditures that will be incurred during the next seven years.
The subcommittee highlighted several funding options that have the potential to create or identify additional operational resources. These funding mechanisms include:
- Increasing the endowment spending distribution;
- Optimizing performance of the University balance sheet;
- Generating additional savings by restructuring the debt portfolio;
- Executing a robust philanthropy campaign to support the Cornerstone Plan, faculty excellence and financial aid;
- Continuing to achieve operational efficiencies and developing new academic revenues; and,
- Crafting a tuition and financial aid model that will enhance affordability and predictability for Virginians.
The University has the opportunity to leverage its financial strength in managing these funds for the direct benefit of students, faculty, staff and the entire commonwealth, officials said.
Over the next several weeks the finance subcommittee will further explore the funding sources to determine the appropriate amount and mix of resources required to fund the framework, and will present recommendations to the full board at its February meeting.
Martin acknowledged the important work of the subcommittee and said the progress report was extremely helpful in framing the discussion of what a new funding model would look like.
“On behalf of the board, I express our sincere appreciation to the members of the finance subcommittee and staff who have spent countless hours since June working on this important issue,” he said. “This is a critical project which will have long-term consequences for future generations of students and faculty. We will continue to give this our top priority, and I believe we will develop a proposal that will satisfy the subcommittee charge,” Martin added.
The budget-setting processes for fiscal year 2015-16 are under way. The board is tentatively scheduled to review a tuition proposal in February and the full budget proposal in April.