University presidents are lobbying the General Assembly to block a budget proposal that would restrict how much tuition revenue they can use for student financial aid.
Low-income students have access to federal financial aid, but funds from tuition and fees are "our major source" for providing aid to students from middle-income families, University of Virginia President Teresa A. Sullivan told a group of senators last week.
While Gov. Bob McDonnell's proposed budget has been praised for increasing funding for higher education, the plan also would cap the amount of revenue used for financial aid that is generated from in-state students through tuition and fees.
McDonnell, expressing concern about rising college costs, wants to study the appropriate use of tuition revenue. His 2012-2014 budget bill contains a provision that would keep the amount at levels set this session.
Sullivan told a Senate Finance Committee panel the language "prematurely curtails" discussions about an important option schools have for providing financial aid.
Asked by Sen. Thomas K. Norment, chairman of the education subcommittee, about "the appetite" of U.Va. donors for helping, Sullivan said financial aid is a difficult area for raising money.
"We do have donors who are willing to give money for merit-based financial aid but not for need-based financial aid, which they see as something more appropriate for governmental agencies to do," she said.
Peter Blake, director of the State Council of Higher Education for Virginia, told the panel that precedent for using tuition for financial aid has a long history in state code, dating to 1936 when the practice was referred to as "unfunded scholarships."
In fiscal 2012-13, tuition revenue budgeted for financial aid by the state's public schools totals at least $110.2 million, according to SCHEV.
Student need is on the rise largely because of the weak economy, Blake said.
In fiscal 2009, 68,716 in-state students at public institutions received federal Pell Grants, which aid families with the most need. The next year the number increased to 95,514, a 39 percent increase.
Sullivan was joined by chief financial officers from several schools. They said the proposed language in the budget bill, while intended to keep tuition in check, could have the unintended consequence of making college less affordable.
Also appearing were James Madison University President Linwood H. Rose and Virginia Community College System Chancellor Glenn DuBois, who made pleas for additional money for faculty salaries to support new state mandates to increase the number of Virginians earning degrees.
Much of the additional $100 million a year McDonnell is seeking would go to incentives for schools to meet those goals, especially increasing degrees awarded in more costly programs in science, technology, engineering, math and health.
Norment said he would like to hear reaction from smaller colleges, especially those that don't have a STEM-H focus, about whether they will be at a disadvantage in competing for the incentive funds.
He said he has been told a number of times "that all the presidents" are very enthusiastic about the way higher education is being restructured, "and I am suspect of that."
The General Assembly last session approved the Higher Education Opportunity Act, also called the "Top Jobs" legislation, which seeks to increase graduates for high-demand STEM-H fields while improving the affordability of college.
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