Plan could save public colleges, universities $300M+ total
While higher education institutions have needed to make budget cuts due to the pandemic, Gov. Ralph Northam announced Tuesday a higher education refinancing plan that would save Virginia’s public colleges and universities a total of more than $300 million (among 16 schools) during the next two years.
Taking advantage of low interest rates, the state will refinance bonds issued by the Treasury Board of Virginia (TBV) and the Virginia College Building Authority (VCBA).
“The COVID-19 pandemic continues to have tremendous impacts on higher education, including the fiscal health of our colleges and universities,” Northam said in a statement. “Families all over the country are taking advantage of record low interest rates to refinance their home mortgages, and we want our public institutions to benefit as well. Refinancing will free up millions of dollars in savings allowing our colleges and universities to make critical investments, meet the needs of Virginia students, and continue offering a world-class education.”
Although schools made internal budget cuts, the state did not have to make cuts to higher education funding, and has retained its AAA bond rating. Under Northam’s plan, institutions will make no principal payments on their VCBA bonds through fiscal year 2023. The proposed restructuring would also extend institutions’ payment plans for two years beyond their current schedule, for both VCBA and TBV bonds.
The following savings are expected:
- Christopher Newport University: $14.4 million
- George Mason University: $58.3 million
- James Madison University: $43.7 million
- Longwood University: $8.2 million
- Norfolk State University: $8.2 million
- Old Dominion University: $29.8 million
- Radford University: $5.1 million
- Richard Bland College of William & Mary: $320,000
- University of Mary Washington: $9.3 million
- University of Virginia: $344,000
- Virginia Commonwealth University: $23.1 million
- Virginia Community College System: $9.7 million
- Virginia Military Institute: $2.8 million
- Virginia Polytechnic Institute and State University: $40.1 million
- Virginia State University: $12.8 million
- William & Mary: $33.7 million
“Our public higher education institutions are critical to Virginia’s success, and we know they are hurting right now,” Senate Finance Committee Chairwoman Janet Howell said in a statement. “Allowing them to refinance some of their debt is an innovative way to save money when they need it most, and I look forward to supporting the legislative portion of this proposal next session.”
Northam will also work with the General Assembly on additional higher education refinancing during the 2021 General Assembly session.
“Gov.r Northam is committed to supporting Virginia’s institutions of higher education,” Secretary of Finance Aubrey Layne said in a statement. “These savings will make a tremendous difference for our colleges and universities as they navigate these challenging times.”
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