AccessUVa Program Recommendation Pat Hogan and Megan Lowe Presentation to the University of Virginia Board of Visitors August 2, 2013 Presentation Outline • AccessUVa Background • Program Review • Program Recommendation • Next Steps 2 AccessUVa Program • Four main components to the program, as it was conceived in 2004: • Met 100% of financial need • Provided all-grant aid for low-income students • Capped need-based loans • Included financial literacy education and debt management strategies 3 AccessUVa Program Benefits • Increased socioeconomic diversity of the undergraduate student population • Reduced the rate of growth of student debt • Met 100% of need for any student with financial need • Brought the University significant acclaim as the: • premiere need-based aid program for a public institution in the United States • national leader in issues of college access and affordability • The success of AccessUVa has allowed the University to continue to admit prospective students based on merit and not ability to pay. 4 Undergraduate Students with Need 36% 34% 32% 30% 28% 26% 24% 22% 20% Fall 1996 Fall 1997 Fall 1998 Fall 1999 Fall 2000 Fall 2001 Fall 2002 Fall 2003 Fall 2004 Fall 2005 Fall 2006 Fall 2007 Fall 2008 Fall 2009 Fall 2010 Fall 2011 Fall 2012 Fall Head Count Students with Need As Percent of Related Population Percent of All Undergraduate Students With Need Percent of In-state Undergraduate Students With Need Percent of Out-of-state Undergraduate Students With Need 5 AccessUVa – Sources of Funds 2008-09 Academic Year SelfHelp: $12 million 20% Other Grants: $26 million 44% Unrestricted Institutional Grants: $21 million 36% Total: $59 million 2012-13 Academic Year SelfHelp, $20 million 21% Other Grants, $32 million 35% Unrestricted Institutional Grants: $40 million 44% Total: $92 million Unrestricted Institutional Grants – Includes tuition revenue-funded grants Other Grants – Includes federal, state and private grants, as well as UVa endowment grants (private donor-funded, restricted grants) Self Help – Includes all loans and work-study 6 AccessUVa Institutional Cost by Family Income (in $ millions) 45.0 40.0 $38.4 35.0 $5.1 $32.3 Millions $26.0 25.0 $21.1 20.0 10.0 5.0 $5.2 $3.9 30.0 15.0 $40.2 $16.6 $11.5 $1.1 $4.4 $14.2 $1.3 $1.1 $1.7 $7.9 $22.5 $3.8 $2.6 $8.7 $7.3 2004-05 2005-06 $13.9 $11.0 $9.6 $5.7 $5.6 $6.0 $13.7 $19.6 $21.1 2011-12 2012-13 $17.4 $9.8 $11.5 $11.2 $12.6 2006-07 2007-08 2008-09 2009-10 - Low Middle 2010-11 High Low: Middle: High: $0 - $46,100 $46,101 - $92,200 $92,201 and above 7 AccessUVa First-Year Student Profile Virginians: 66.1% (all first-year students 65.2%) Non-Virginians: 33.9% (all first-year students 34.8%) SAT: 1304 (all first-year students 1349) GPA: 3.16 (all first-year students 3.26) Retention 97.1% (all first-year students 97.4%) Graduation Rate: 88.9% (entire first-year cohort 93.3%) 8 Program Review • Art & Science Group LLC was hired at the end of 2011 to assess the effects of financial aid on the admissions process and outcome. 1. Financial Aid Optimization Study 2. Peer Benchmarking Study 3. Prospective Student Survey 9 Key Study Findings • UVa’s aid program is generous for a public institution • UVa’s prospects are more sensitive to changes in aid than to changes in price • Reductions in levels of aid would have negative enrollment effects • UVa is underpriced relative to both in-state and outof-state market competition • Prospects overestimate cost of attendance and are somewhat unaware of the generous components of the AccessUVa program • Areas for improvement include fundraising and marketing/publicity 10 Administrative Changes • As reported to the Board in November 2012, the following changes were implemented for the first year class beginning 2013-14: • Financial aid application deadline of March 1st • Offering work study to low-income students and developing meaningful work opportunities with faculty • Minimum student contribution for all financial aid recipients • Impact: moderates the escalation of annual program costs by $4.3 million (upon full implementation in 2017-18) 11 Current Recommendation for Program Modification TAT 0 IRGINIA Recommendation Objectives • Recognizing that unrestricted institutional grants will continue to increase each year, the recommendation will moderate the escalation of costs while preserving our premier financial aid program and maintaining student yield and socioeconomic diversity. 13 Program Recommendation • Standardize financial aid package components by offering loans to all students with financial need, regardless of income level • Loan cap of $28,000 (over four years) would limit indebtedness upon graduation • Impact: moderates the escalation of annual program costs by $6.0 million (upon full implementation in 2017-18) 14 Future Annual Unrestricted Institutional Grants • Without Recommendation: $52.1 million, by 2017-18 • With Recommendation: $46.1 million, by full implementation in 2017-18 • Net Difference: $6.0 million (annual, ongoing) 15 Loan Repayment • Assuming a student takes out the maximum in needbased loans, $28,000 over four years, a typical repayment plan over 10 years would be: • $287 per month • $3,444 per year • A typical repayment plan over 20 years (if loans are consolidated) would be: • $173 per month • $2,076 per year 16 Next Steps: Other Program Improvements • Report key metrics annually to the Board and monitor program internally on a quarterly basis • Create a greater awareness of price and financial aid program through an ongoing communications and marketing plan • Establish a campaign for private fundraising to support AccessUVa – both need-based and meritbased aid 17 Next Steps: Defining Affordable Excellence • Affordable Excellence: the University will develop and implement a model that generates adequate resources to sustain academic excellence in all schools of the University while promoting a diverse student body and University community and enhancing the financial predictability and affordability through the AccessUVa program and additional measures envisioned in the Commonwealth of Virginia’s Higher Education Opportunity Act. 18