Northam proposes saving colleges $300 million by restructuring higher education debt | Govt-and-politics

“Our message is that you don’t have to shut down,” GMU President Gregory Washington said in an interview on Tuesday. “You actually can manage this thing.”

However, the public health emergency has driven up operating costs while drying up revenues at Mason and other higher education institutions in Virginia.

“Clearly, what the governor has proposed will be a benefit to currently struggling institutions,” Washington said.

Business leaders also welcomed the governor’s debt restructuring plan.

Gil Minor, chairman of the Virginia Business Higher Education Council, called the plan “an important step in the commonwealth’s response to the unprecedented challenges facing Virginia’s higher education system and the students and communities they serve.”

The General Assembly would have to approve the portion of the plan that would refinance about $823 million in debt approved by the state Treasury and save institutions about $109 million in deferred payments over two years. The proposed refinancing

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Northam proposes to restructure higher education debt, saving schools $300 million | Govt-and-politics

* $2.8 million for Virginia Military Institute;

*  $344,000 at the University of Virginia; and

*  $320,000 at Richard Bland College of William & Mary.

Five of the institutions – UVA, Tech, William & Mary, VCU and James Madison – are Tier 3 institutions that could restructure their debts themselves because of their AA bond rating. Layne said the state potentially could refinance at a lower interest rate because of its AAA bond rating on Treasury backed bonds and AA+ rating on college building authority bonds.

“When we have Triple-A bond ratings we’re able to get lower interest rates,” said Northam, who said that the nation’s bond rating agencies already had reviewed the plan.

Protecting the state’s AAA bond rating is a top priority as the House of Delegates and Senate prepare to release their proposed changes to the revised budget that Northam submitted last month at the beginning of

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