President Casteen Delivers Wide-Ranging Report on the State of the University

February 06, 2008
February 6, 2008 — President John T. Casteen III told members of the University of Virginia community on Wednesday that more than 100,000 people have already made gifts totaling more than $1.6 billion to the Campaign for the University of Virginia.

"I do not know of campaigns that have found that kind of broad-based support in other institutions," Casteen said. "Alumni and friends, parents of students, foundations and others have had tremendous impact on this initiative." The remarks were part of his annual State of the University Address, delivered in Old Cabell Hall.

Even though the campaign has now raised more than half its $3 billion goal, Casteen said, coming months will be hard work and a time when "big ideas are crucial and vetting big ideas is a complicated challenge."

“In the first half of the campaign, we gathered support for buildings. Now we will generate funds for academic programs that will populate buildings.”

The core visions of the campaign and the University are the same, he said.

"The campaign is driven, as I've come to believe the University is driven, by the conception that in the end, for people who are free or intend to be free, knowledge and science must be first and foremost useful," Casteen said. "It forms character; it forms work; it informs national life."

Casteen pointed to the work of the third Commission on the Future of the University, which will send its report to the Board of Visitors this week for review and approval. The commission, composed of deans, members of the Faculty Senate Executive Committee, faculty and students, identified three priorities for immediate efforts: the student experience; global education, research and service; and science and technology.

The next step, Casteen said, will be aligning the ideas in the plan with budgeting.

Casteen cited increasing support for AccessUVA, the University’s innovative financial aid program, which includes 848 students from the Class of 2011 who entered in the fall. Almost a quarter of these students are from families living within 200 percent of the federal poverty guideline; they receive full scholarship support.

Increased funding to AccessUVA could expand aid to middle-income students, Casteen said.

“Federal guidelines on financial aid are unrealistic for families with multiple children in college, and the state provides no support for this group,” he said.

Casteen discussed the University's progress under Virginia’s Restructuring Act. The act gives U.Va., Virginia Tech and the College of William and Mary freedom from state control in areas such as spending, tuition and personnel management but requires the schools to meet specific goals.

Because the University met statewide goals in the first certification process last spring, U.Va. now manages the investment of tuition and other non-General Fund operating cash. "This enables us to match our investments with our cash-flow needs," Casteen said. "Certain reserves will be invested for longer periods in higher yielding instruments."

Casteen also highlighted two other areas of this new agreement between U.Va. and the state —  a target for the number of transfers to the University from Virginia's community colleges and responsibilities for economic development in Southwest Virginia.

A 2006 agreement with the Virginia Community College System guarantees admission to U.Va. for VCCS graduates who meet course and grade requirements. The 2007-08 target for VCCS transfers to U.Va. was 282,  and the University had 300 transfers this year. In Southwest Virginia, U.Va. has economic development programs under way in health care and support for K-12 education and business.

Casteen also discussed areas of concern, including emergency preparedness in the wake of the Virginia Tech shootings last April.

U.Va. is taking "a systematic and rational approach to these issues," he said. Preparedness measures include establishing a permanent emergency management office, planning a Grounds-wide siren/public address system, replacing "panic bars" with flat push-bars on doors, installing locks so classrooms can be locked from the inside, and developing a notification system that uses text messaging, e-mail and strategically located LCD screens to give alerts.

Other issues that Casteen addressed:

• The preliminary six-year graduation rates for all students who entered U.Va. in the fall of 2001 is 93.1 percent, Casteen said. That would be the highest rate since the University began keep records in the 1970s. "I take that to be a kind of demonstration of confidence in the work faculty members, deans and others do with our students. It also says something about the students' quality of preparation."

• This time a year ago, Virginia had a strong economy and a $1 billion general fund surplus, noted Casteen, but a weakening economy has led to predictions of a shortfall of between $800 million and $1 billion in tax collections to fund the current budget. As one response, state officials announced on Tuesday a moratorium on hiring, purchases, and travel for the state's line agencies. But, Casteen said, this does not apply to colleges and universities, though it does reflect "the depth of the state's problems."

• Casteen said Gov. Kaine's proposal to delay a 3 percent salary increase for state employees until July 1, 2009, would be a problem for the University because of competition from other top-tier institutions. Although this is not a year when it can be said that higher education has become a whipping boy in the budgeting process, Casteen said, it is a year of "serious reflection and consideration" on budget issues. Should the revenue projections turn out to be bad and salary increases not available from state sources, he said the University would argue for the freedom to raise salaries appropriately to the market regardless of what the state is able to do.

• U.Va.'s endowment of $5.1 billion ranks 19th among all colleges and universities in the United States. Recent media reports have brought scrutiny of these endowments, Casteen said, and the U.S. Senate Finance Committee has asked 136 colleges and universities with endowments above $500 million to answer a series of questions.
    "Some members of Congress and some activists have proposed mechanisms — most not now lawful and some are facially unconstitutional if applied to public universities — to tap endowment funds to cover what federal and state governments no longer provide for student financial aid," he said. The issues are now only loosely defined, but some proposals pose major challenges to a public university like U.Va., he added.