Virginia Gov. Ralph Northam is announcing a new plan to refinance debt related to construction on college campuses, a move he said will save public colleges $300 million over the next two years.
Northam made the announcement Tuesday at George Mason University, which the governor's office said will save $58.3 million over the next two years.
Though Mason and other public colleges and universities are feeling the same pandemic financial pinch as other businesses, Northam says the commonwealth has found a way to help ease the financial strain.
"One side of effect of the pandemic has the potential to help our public colleges,” Northam said. “That's the low interest rates that we're seeing right now."
The governor said the state will take advantage of low interest rates by refinancing bonds issued by the Treasury Board of Virginia and the Virginia College Building Authority. Northam said colleges would not have to make any principal payments on any VCBA bonds through fiscal 2023.
Northam said schools can use the savings to offset losses from the pandemic or to help sustain a balanced funding level over the next few years. There is no obligation to use the savings to freeze or lower tuition rates.
"Everybody across the commonwealth will be benefited from this," Virginia Secretary of Finance Aubrey Lane said.
Northam's plan comes amid widespread disruption at Virginia colleges due to the coronavirus. The impact of the governor's refinancing plan will affect schools differently. Under Northam's plan, James Madison University will save $43.7 million, Virginia Tech will save $40 million and the University of Mary Washington could save more than $9 million, while the University of Virginia is expected to see only about $344,000 in savings.
Northam toured Mason, seeing first-hand what the school has done to protect students and staff during the pandemic.
"Our COVID-19 cases are the lowest of any public institution in the commonwealth, and our plan for safe return to campus has exceeded even our expectations," Mason President Gregory Washington said.