Board Finance Committee discusses AccessUVa funding

Committee also examines Medical Center acquisition, debt portfolio plans

The Board of Visitors Finance Committee received an update on AccessUVa metrics at its meeting Thursday.

The University's financial aid program, which boasts the ability to meet 100 percent of demonstrated need, cost $48 million in the 2014-15 academic year, an uptick from $45 million last year. In total, the program serves 5,179 students — 71 percent of them in-state students — which is slightly up from 5,100 students last year.

“More and more students are really focused on net price and really understand net price rather than listed price,” Hogan said. “In many ways, students are smarter shoppers now than they were in the past.”

University President Teresa Sullivan said AccessUVa makes the University competitive in attracting students.

“Since we are need-blind, we are looking first at the student’s academic record, and then we will further consider other qualifications for aid,” Sullivan said.

Following a change in policy last year, the University now includes loans in all aid packages — previously, students in the lowest income bracket received all-grant loans. Prospective students are more drawn to institutions which offer loan-free aid, said Patrick Hogan, the University’s executive vice president and chief operating officer.

“More and more students are really focused on net price and really understand net price rather than listed price,” Hogan said. “In many ways, students are smarter shoppers now than they were in the past.”

In total, 33 percent of students receive aid through AccessUVa, and the average 2012-13 student indebtedness was $22,933.

The Committee also reviewed renovation plans for the previous headquarters of the University acquisition group on Ray C. Hunt Drive to create a center of clinical activities for urology and cardiology. The renovation, which aims to provide better patient care and give better access to parking, will cost between $17 and $21 million.

“We plan to renovate it from an office space to a special purpose clinical building,” Hogan said. “We need to redo plumbing, wiring, and what have you to create a first class urology space.”

The Board is also looking to take advantage of low interest rates to leverage and optimize its debt portfolio. Traditionally, the University Investment Management Company has relied on fixed interest rates when taking out loans. By taking advantage of a variable rate — one that can change based on economic factors — the University hopes to reduce liquidity risk and risks related to other financial deals.

“While this is a very creative approach, there’s nothing new under the sun or terribly aggressive in terms of the approach,” Finance Committee Chair Victoria Harker said.

The University is one of eight public universities with AAA credit rating, which helps the University obtain low interest rates. The University consistently outperforms peers at long-term investing and only falls behind Duke and Notre Dame among peer institutions in short-run investment returns, UVIMCO CEO Larry Kochard said.

“With that said, I give the same warning every time I’m up here,” Kochard said. “Our approach is that there are going to be periods in which we underperform our benchmark and our peers. If we try to beat benchmark and peers during every quarter, it will lead to poor results and trying to imitate our peers. If we were trying to play that game, that would have produced bad results. We try to play to our strengths”

Looking forward, Kochard said the Board will need to continue evaluating the University's investment strategy to find ways to improve.


“When I think of all the things we’ve done over time, real estate is probably where we’ve performed the worst,” Kochard said. “We did a pretty thoughtful analysis of what we can do to improve.”

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