UVa Builds Scholarship Endowment to Half-Billion Dollars

by James A. Bacon

Over the past four years the University of Virginia has raised $500 million, enough to endow 350 undergraduate and graduate scholarships, President Jim Ryan informed the Board of Visitors Friday. He highlighted two programs in particular that share the goal of “fostering excellence and diversity of the student population, and ensuring their success.”

The University Achievement Awards, inaugurated during the presidency of John T. Casteen are given to Virginia students who demonstrate outstanding leadership and character while overcoming personal hardship. The Blue Ridge Scholars program, launched in 2014 with a $4 million gift from alumnus John Griffin, supports undergraduate students with exceptional academic promise and significant financial need.

The need for financial assistance has intensified over the years as UVa has aggressively increased tuition, fees, and charges for room and board. The annual cost of attendance (including books and modest personal expenses) runs around $34,000 for undergraduate Virginians and $69,000 for out-of-state students before financial aid is taken into account.

The university recently pumped up its financial-aid endowment with a $30 million contribution from the Strategic Investment Fund (SIF), a fund consolidated from various business accounts and other sources that the University of Virginia Investment Management Company (UVIMCO) is able to invest at higher rates of returns than would be generated otherwise.

Ryan lauded the Blue Ridge Scholars program, which he described as “a really effective recruitment tool” used primarily to recruit out-of-state students. The program supplements other sources of financial aid with grants of $1,000 to $7,000 yearly per student. “It has enabled us to recruit some phenomenal students who would not have attended,” he said.

UVa is prohibited by federal law from granting financial assistance based on ethnicity or race, and the financial aid website states, “We accept students solely on their academic merit, regardless of their ability to pay.” However, as Ryan described it, the University Achievement Awards have broader criteria than academic merit alone. Scholarships, he said, are given to students who have shown leadership, have a history of overcoming adversity, are members of a minority ethnic group, reside in a rural or inner-city location, or are members of a single-parent household.

Ryan told the Visitors that he has met with the board of the Walter N. Ridley Scholarship Fund, a privately maintained fund named after the first African American to graduate from UVa that dispenses scholarships to African American students, although he did not say to what purpose. Ryan said the University Achievement Awards and Blue Ridge Scholars program “give us resources to … bring exceptional students to the university and increase diversity.”

Bacon’s bottom line: As an elite institution with considerable market-pricing power, UVa pursues a revenue-maximization tuition model tempered only by the political necessity of restraining tuition & fees for in-state students. This model allows the university to pursue prestige-enhancing initiatives — such as recruiting superstar faculty and students with high SAT scores — that support its quest to remain one of the nation’s leading public universities. However, the high-tuition model also makes attendance unaffordable for students from lower-income families, in particular from African-American and Hispanic families, thus undercutting diversity. Building up a $500 million scholarship endowment papers over the inherent tension between the goals of pursuing “excellence” and increasing diversity.

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14 responses to “UVa Builds Scholarship Endowment to Half-Billion Dollars”

  1. Doug McAvoy Avatar
    Doug McAvoy

    Where is that money kept? In other words, can they claim its helping the economy through investment, or does it just sit in a bamk account or bonds gathering dust?

    1. sherlockj Avatar


  2. Nancy_Naive Avatar

    Good for them! Of course, they have real estate holdings, an equities portfolio that knock your socks off, and all being managed by a financial management group that’s outdoing the best of the best. I read a Yahoo! Finance news article on them a few years back.

  3. LarrytheG Avatar

    Trying to think about how what UVA is doing with it’s funds and directing them to certain students would be done by the free market or government or charities.

    I presume the folks who have provided the endowments are in support of how UVA is using those funds.

    I note also, they specifically reject the idea that academic merit is the only and most important critera and indeed UVA grads are not really viewed as the best STEM grads.

    1. “I presume the folks who have provided the endowments are in support of how UVA is using those funds.”

      The “folks” from the Strategic Investment Fund would likely mostly people who paid hospital patient fees. I’m pretty sure they have no idea how it ended up being used.

      1. LarrytheG Avatar

        Yep.. But just like any other hospital that choose to invest whatever it makes over it’s costs.

        They’ve got a pretty good low-cost labor supply.

        Regular hospitals have a lot of high-dollar administrators but UVA chooses, instead to help some students?

        All good, right?

        1. Larry, I was directly answering your question if the people who funded the endowment (“quasi-endowment” would be the proper term in this case) knew how it was funded. The people who pay patient fees don’t know this is one where it went (in the case of the $30M from the SIF).

          UVA healthcare has non-profit status. I am not comfortable with profits from a non-profit going to whatever cause the UVA board directs. I certainly don’t think this was the intended use of non-profit status.

          1. LarrytheG Avatar

            Many/most hospitals are non-profit and are required to provide community services as a condtion of that status.

            Some of their services they offer are “profitable” and they may well use some to help fund a free clinic. Works that way in Fredericksburg.

            But truthfully I do not know the specifics of UVAs finances, not sure all of them are actually disclosed but I don’t see what they are doing with their endowments as “bad” at all.. no worse than charging for tickets to sports events to pay the tuition/room/board of the players AND actually fund some sports that are not “profitable”!

  4. djrippert Avatar

    “However, the high-tuition model also makes attendance unaffordable for students from lower-income families, in particular from African-American and Hispanic families, thus undercutting diversity.”

    Why is the high-tuition model particularly hard for lower income African-American or Hispanic families to afford? It would seem equally hard for low income white or Asian-American families too.

    1. LarrytheG Avatar

      We do that a lot here……..

    2. Nancy_Naive Avatar

      Of course, we *could* go tuition-free.

    3. To be more precise, I should have said that African-American and Hispanic families are disproportionately poor, which means they are disproportionately impacted by the high-tuition model.

      1. The UVA model is edging toward high-tuition and higher aid, similar to privates. The result may be that poor families are actually paying less at UVA than they used to and less than at lower overall lower cost schools like Virginia Tech, which do less redistribution through aid.. I think SCHEV data supports this. The flip side is that the financial burden is shifted to middle class (and the wealthy).

  5. Nancy_Naive Avatar

    I don’t get it. Isn’t this the point where the RPV should be shouting, “It is ALIVE!”
    I mean, which party was it that cut public funding to the State colleges and universities in the 70s and 80s claiming that they should become more like private universities? Wasn’t that the Republicans?
    Then wasn’t it just a few years ago (Sullivan-Dragas era) when the Republican led GA actually suggested confiscating UVa’s endowment and spreading it around to the other State schools?
    Jesus, guys, make up your minds!

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