Students entering the University of Virginia’s AccessUVa program starting in fall 2014 will have loans included in their financial aid packages.
In a 15-2 vote Saturday, the Board of Visitors rolled back the “no loans” policy under the school's signature financial aid program. Helen E. Dragas, the former rector, and board member Kevin Fay cast the dissenting votes.
The move requires students to take out loans for costs up to $7,000. Beyond the first $7,000, students would qualify for grants. That means a student who qualifies for financial aid could take on up to $28,000 in debt under AccessUVa over the course of four years.
The move is estimated to save the university about $1.5 million next year; it will save about $6 million a year annually by the time it’s fully implemented in 2018, after all the classes grandfathered in under the old policy are scheduled to graduate.
Administrators, who brought the proposal before the board, said the change was the best way to cut the skyrocketing cost of the program while continuing to meet 100 percent of student need.
UVa joins a growing list of schools – including Claremont McKenna College, Yale, Cornell and the Massachusetts Institute of Technology – that offered grant-only aid packages to their lowest-income students, only to roll the policy back.
Patrick D. Hogan, the school’s chief operating officer, noted that UVa, like the other schools, had to make the move to keep costs from spiraling out of control.
“Everybody, just like UVa, wants to sustain their financial aid program,” Hogan said. “We want to sustain our program under the principles on which it was founded.”
In its form before the vote, AccessUVa met through grants 100 percent of need for all students from families with incomes up to 200 percent of the federal poverty line. The program had a price tag of about $92 million. About $40 million came directly from the university, according to figures presented earlier this year.
In the roughly 10 years the program has existed, in-state tuition has increased 140 percent, the economy has faltered and student need has grown sharply. The effect: a quadrupling of the amount the university must pay in to AccessUVa. About a third of UVa’s more than 14,000 undergraduates qualify for some form of aid, up from about a fourth of the student body before the program started, and beyond what the university's administrators envisioned when they created the program.
Administrators said Friday that the change to the financial aid program would affect about 250 students in the 2014-15 academic year, but that was a rough estimate based on the number of low-income students in this year’s class. Officials adjusted that number Saturday to about 336 students. By 2018, it will affect about 1,375 students.
Vice Rector William H. Goodwin, said low-income students should have the same earning potential after college. There’s no reason, he said, to give them a break the higher-income students don’t have.
“They’re all graduating with the same degree,” he said.
Dragas said low-income students often don’t have the same levels of support from parents or the same social networks that wealthier students have. That makes it harder for them to repay after college, she said.
She also questioned the idea that the university is still meeting 100 percent of student financial need.
“To me, it doesn’t sound like you’re meeting full need – the students are taking out loans.” she said to a panel of staff members that included Greg W. Roberts, the dean of admissions.
Roberts said most universities meet need with a combination of loans and grants. AccessUVa’s policy toward low-income students was generous, he said; this change just brings the university in line.
“This is how it’s done throughout higher education,” he said.
Dragas said after the meeting that she was concerned the change doesn’t fall in line with the university’s public mission, which includes “keeping tuition as low as possible and aiding those with most need as much as possible,” she said.
But it was much more clear-cut for board member John L. Nau III, who worked on the proposal in committee. The program was becoming unsustainable; this change would allow it to continue and impact a relatively small group of students, he said.
“This seems to be … the best business decision to try to stabilize AccessUVa,” he said. “It’s more of a business than a philosophical approach.”
One alternative brought before the board was to cut the amount of grant aid going to out-of-state students, who receive a majority of grant money – about $40 million altogether. But administrators and board members agreed that watered down the quality of their admissions class. As a group, school President Teresa A. Sullivan said, out-of-state students outperform in-state students academically.
Eric McDaniel, the student body president, said the Student Council opposed cutting grant aid but realizes the board had to make a difficult decision to continue the program.
“As much as I would have preferred to see us continue to try, I do understand that there are some incredibly tough calls to be made,” he said.
The advocacy group Reform the UVa BOV posted the decision on its Facebook page, garnering more than 40 comments in less than an hour.
Walter Heinecke, an associate professor, said board members were out of touch.