What kinds of state financial support can Virginia provide to historically Black colleges and universities (HBCUs), including private HBCUs?

Subject

What forms of state financial assistance may legally be provided to Historically Black Colleges and Universities (HBCUs) in Virginia, particularly private HBCUs, given the constitutional prohibition on direct appropriations to private colleges.

Plain-English summary

Virginia has two HBCUs that are public (Virginia State University and Norfolk State University) and three that are private (Hampton University, Virginia Union University, and Virginia University of Lynchburg). The public HBCUs receive state appropriations like any other public university. Private HBCUs face a constitutional roadblock: Article VIII, § 10 of the Virginia Constitution generally bars state appropriations to schools or institutions of learning not owned or controlled by the state, and Article IV, § 16 prohibits appropriations to entities controlled by churches or sectarian societies, or to charitable institutions not owned or controlled by the Commonwealth.

Delegate Cordoza asked the AG what funding pathways remain open. AG Miyares laid out three:

1. Student aid that flows through private HBCUs. Article VIII, § 10 allows the General Assembly to appropriate funds for educational purposes "in furtherance of . . . collegiate or graduate education of Virginia students in . . . nonsectarian private schools and institutions of learning." Section 11 of the same article extends similar authority to grants to or on behalf of students at nonprofit private higher education institutions whose primary purpose is collegiate or graduate education and not religious training. The General Assembly can pay funds directly to the student, to the institution on behalf of the student, to the State Council of Higher Education for Virginia (SCHEV), or to another distribution agency. Examples: SCHEV's Virginia Tuition Assistance Grant (VTAG) program, the Two-Year College Transfer Grant, and the pending HBCU Opportunity Fund.

2. Public contracting. Article VIII, § 11 allows the Commonwealth or any political subdivision to contract with qualifying private institutions for the provision of educational or other related services. So the state can fund private HBCUs by buying services from them, as long as procurement requirements are followed.

3. VCBA facility financing. Article VIII, § 11 also lets the General Assembly create an agency to help qualifying private higher education institutions borrow money to construct educational facilities, with the proviso that the Commonwealth is not liable for the debt. The General Assembly created the Virginia College Building Authority (VCBA) under §§ 23.1-1220 to -1238, which provides conduit financing for qualifying private nonprofit institutions.

For public HBCUs, the constitutional concerns do not apply. The General Assembly has nearly unfettered authority to fund Virginia State, Norfolk State, and any other public HBCU. The AG flagged the 2009 OCR Final Report, which found Virginia had eliminated the vestiges of its formerly segregated higher education system, but emphasized that the report did not end the Commonwealth's responsibilities to public HBCUs.

The opinion is more a roadmap than a legal restriction. It tells the General Assembly: here is what you can do, here is how to structure it, and here are the constitutional limits you need to respect.

What this means for you

If you are a state legislator considering HBCU funding legislation

The opinion holds that, for private HBCUs, the General Assembly may provide support through three constitutional channels and identifies each:

• Student-benefit appropriations. The opinion concludes that appropriations for the benefit of students (paid to the student, to the institution on the student's behalf, to SCHEV, or to another distribution agency) are permitted under Article VIII, §§ 10 and 11. It points to VTAG, the Two-Year College Transfer Grant, and the then-pending HBCU Opportunity Fund as examples.
• Public contracts. The opinion holds that Article VIII, § 11 lets the Commonwealth or a political subdivision support qualifying private HBCUs through properly procured public contracts for educational or related services.
• VCBA conduit financing. The opinion holds that Article VIII, § 11 authorizes the Virginia College Building Authority to assist qualifying private HBCUs in borrowing to build educational facilities, with the Commonwealth not liable for the debt.

For public HBCUs (Virginia State and Norfolk State), the opinion holds the General Assembly has "nearly unfettered authority" to provide financial support, and states the General Assembly "should seek to fund the Commonwealth's public HBCUs at high levels."

The opinion limits the private-HBCU exceptions to institutions whose primary purpose is collegiate or graduate education rather than religious training or theological education.

If you are an HBCU administrator (private or public)

The opinion holds that direct institutional appropriations to private HBCUs are generally barred, while student-benefit appropriations, public contracts, and VCBA conduit financing are permitted for qualifying institutions. Eligibility for the § 11 pathways turns on the primary-purpose test (collegiate or graduate education, not religious training). For public HBCUs, the opinion treats the funding question as the standard public-institution appropriations authority, subject to no comparable constitutional limit.

If you are an HBCU student or parent

The opinion identifies existing state programs that reach students at private HBCUs, including the Virginia Tuition Assistance Grant (VTAG) and the Two-Year College Transfer Grant, both administered through SCHEV and structured as student-benefit funding. The opinion addresses state funding pathways only; it does not speak to federal aid such as Pell Grants or federal student loans.

If you are a procurement officer at a state agency

The opinion holds that the public-contracting pathway operates "through properly procured public contracts" for educational or related services. It treats the constitutional exception as bypassing the appropriations prohibition, not procurement requirements; the opinion does not set out the procurement procedures themselves.

Common questions

Q: Why can't Virginia just give money directly to private HBCUs?
A: The Virginia Constitution generally prohibits direct state appropriations to private schools (Article VIII, § 10) and to charitable institutions or sectarian organizations (Article IV, § 16). These provisions are meaningful constitutional limits. The three exceptions in this opinion are the constitutional workarounds.

Q: What is the difference between Article VIII, § 10 and § 11?
A: Section 10 generally bars direct appropriations to private institutions but allows student-benefit appropriations to nonsectarian institutions. Section 11 expands authority to grants to or on behalf of students at nonprofit private institutions whose primary purpose is collegiate or graduate education (not religious training), and authorizes public contracting and conduit borrowing through the VCBA. The two sections work together; the General Assembly can rely on either depending on the institution's character.

Q: Are religious HBCUs barred from state support?
A: Not entirely. Section 10 allows student-benefit appropriations only to nonsectarian institutions. Section 11 allows student grants and public contracts at private institutions whose primary purpose is collegiate or graduate education even if the institution has religious affiliations, as long as religious training is not the primary purpose. Virginia Union University, for example, has Baptist roots but its primary purpose is collegiate education and it qualifies under § 11.

Q: What is the VCBA, and why does it matter for HBCUs?
A: The Virginia College Building Authority is a state bond issuing authority that provides conduit financing for capital projects at qualifying private nonprofit higher education institutions. Conduit financing means the VCBA issues bonds on behalf of the institution; the institution is liable for repayment, and the Commonwealth is not. This gives institutions access to tax-exempt bond markets without putting state credit at risk.

Q: Are public HBCUs funded the same way as other Virginia public universities?
A: Yes, structurally. Virginia State and Norfolk State are public institutions and receive General Fund appropriations, capital appropriations, and other state support like other public universities. The 2009 OCR Final Report addressed historical equity concerns, but the funding mechanism is the standard public-university appropriations process.

Q: What is the HBCU Opportunity Fund?
A: At the time of the opinion (February 2022), the HBCU Opportunity Fund was pending legislation (HB 30/SB 30, Item 142(L)(1)) that would provide scholarship funds exclusively for students at private HBCUs. Structured as student-benefit funding, it falls within the Article VIII, § 10 and § 11 exceptions. Whether and how the program was ultimately enacted in subsequent budgets is a fact question outside this opinion.

Background and statutory framework

Virginia's constitutional limits on appropriations to private institutions are a 19th-century inheritance. The framers of successive Virginia constitutions were wary of state funding for sectarian or private institutions, and the current language reflects that history. The exceptions in Article VIII, §§ 10 and 11 were carefully drawn to permit student aid and public contracting without breaching the general prohibition.

Federal HBCU policy provides important context. Title III of the Higher Education Act establishes federal funding for HBCUs and minority-serving institutions. Federal aid to HBCUs predates much of the state-level structure and operates independently of Virginia constitutional limits.

The OCR Final Report of January 8, 2009 closed out a long-running federal civil rights investigation of Virginia's higher education system, concluding that Virginia had eliminated the vestiges of de jure segregation. The report did not end Virginia's affirmative obligations to support public HBCUs, but it released the Commonwealth from specific consent-decree-like monitoring. The AG's opinion implicitly leans on the post-OCR posture: the Commonwealth has discretion (and, the AG argues, responsibility) to fund HBCUs at high levels going forward.

The three exception pathways the opinion lays out are practically and legally separate. Student-benefit appropriations are need-based or merit-based grants that follow the student. Public contracts are arms-length transactions for services. VCBA financing is conduit borrowing for capital projects. Each has its own structural and procedural framework, and a comprehensive HBCU funding package might use all three.

Citations and references

Constitutional provisions:

• Va. Const. art. IV, § 16 (limits on appropriations to charitable or sectarian institutions)
• Va. Const. art. VIII, § 10 (limits on appropriations to private institutions; student-benefit exception)
• Va. Const. art. VIII, § 11 (further authority for student grants, public contracts, VCBA financing)

Statutes:

• Va. Code Ann. §§ 23.1-1220 to -1238 (Virginia College Building Authority)

Prior AG opinion cited:

• 2008 Op. Va. Att'y Gen. 22 (interpreting Article VIII, § 10 student-benefit authority)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2022/22-003-Cordoza-issued.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

COMMONWEALTH of VIRGINIA

Office of the Attorney General

Jason S. Miyares
Attorney General
202 North Ninth Street
Richmond, Virginia 23219
804-786-2071
Fax 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

February 25, 2022

The Honorable A. C. Cordoza
Member, Virginia House of Delegates
Post Office Box 14545
Newport News, Virginia 23608

Dear Delegate Cordoza:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You ask what forms of state financial assistance may legally be provided to Historically Black Colleges and Universities (HBCUs) in the Commonwealth, particularly private HBCUs.

Response

While the Constitution of Virginia, as a general matter, prohibits state appropriations to private colleges and universities in Virginia, it provides certain exceptions that permit the General Assembly to provide particular forms of support to such institutions. Under the terms of these exceptions, the General Assembly is authorized under the State Constitution to appropriate funds for the benefit of students in furtherance of collegiate or graduate education at qualifying private HBCUs. The General Assembly also is authorized to appropriate funds for the support of qualifying private HBCUs through properly procured public contracts. Moreover, the Constitution provides authority for the Virginia College Building Authority to assist qualifying private HBCUs in borrowing to construct educational facilities.

Finally, the General Assembly has nearly unfettered authority to provide state financial assistance to public HBCUs in the Commonwealth.

Applicable Law and Discussion

Article VIII, § 10 of the Constitution of Virginia provides generally that "[n]o appropriation of public funds shall be made to any school or institution of learning not owned or exclusively controlled by the State or some political subdivision . . . ." Further, Article IV, § 16 of the Constitution of Virginia provides generally that the General Assembly "shall not make any appropriation of public funds, personal property, or real estate to . . . any association or institution of any kind whatever which is entirely or partly, directly or indirectly, controlled by any church or sectarian society" or make any "like appropriation to any charitable institution which is not owned or controlled by the Commonwealth."

While these provisions generally prohibit appropriations of state funds to private HBCUs in the Commonwealth, the Constitution sets out several exceptions that authorize the General Assembly to provide certain forms of support to these institutions. The effect of these exceptions is that while direct institutional appropriations is prohibited, a range of options exist that permit the General Assembly to provide certain forms of financial support to private HBCUs in Virginia. In particular, the General Assembly may make appropriations for the benefit of students at private HBCUs, as set forth under the terms of Article VIII, § 10 and § 11 of the State Constitution. The General Assembly may also appropriate funds for the support of qualifying private HBCUs through properly procured public contracts. Additionally, the Virginia College Building Authority, a state bond issuing authority, may assist qualifying HBCUs in borrowing to construct educational facilities.

The terms of these provisions permitting the General Assembly to provide certain forms of financial support for private HBCUs in Virginia, including the specific criteria by which private HBCUs may qualify for state financial assistance, are set forth and explained more fully below.

A. State Financial Support for the Benefit of Students at Private HBCUs

Article VIII, § 10 of the Virginia Constitution provides that "the General Assembly may . . . subject to such limitations [as it may impose], appropriate funds for educational purposes which may be expended in furtherance of . . . collegiate or graduate education of Virginia students in . . . nonsectarian private schools and institutions of learning." Under this provision, provided a private HBCU is nonsectarian, the General Assembly may make appropriations for the benefit of students at the institution, without restriction as to the "type of funding or the method of appropriation." As a prior opinion of this Office has concluded, this provision permits the General Assembly to appropriate funds, such as loan or grant funds: (1) directly to students, (2) directly to the qualifying institution on behalf of the student, (3) to the State Council of Higher Education for Virginia (SCHEV), or (4) to some other agency created by General Assembly to distribute the funds.

Article VIII, § 11 of the Virginia Constitution provides separate authority for the General Assembly to provide funds for the benefit of students at private HBCUs in Virginia. This provision states that "[t]he General Assembly may provide for loans to, and grants to or on behalf of, students attending nonprofit institutions of higher education in the Commonwealth whose primary purpose is to provide collegiate or graduate education and not to provide religious training or theological education." Under this provision, the General Assembly may provide the described support even if the private HBCU is sectarian; however, the institution must not have the primary purpose of providing religious training or theological education.

Examples of existing programs that provide state assistance to students at private HBCUs include SCHEV's Virginia Tuition Assistance Grant program (VTAG) and its Two-Year College Transfer Grant. Legislation is also currently pending before the General Assembly that would establish the HBCU Opportunity Fund, which is anticipated to provide scholarship funds exclusively for students at private HBCUs. While there is also legislation pending that would establish the Virginia Diverse Educator Scholarship Fund and Program, this legislation currently would apply only to students of public HBCUs. The General Assembly may consider expanding the Virginia Diverse Educator Scholarship Fund and Program to include private as well as public HBCUs.

B. Support of Private HBCUs through Public Contracting

Article VIII, § 11 states that the General Assembly may "provide for the Commonwealth or any political subdivision thereof to contract with [qualifying private institutions of higher education] for the provision of educational or other related services." This provision authorizes the General Assembly to appropriate funds for the support of qualifying private HBCUs through properly procured public contracts.

Legislation is currently pending in the General Assembly to expand the types of colleges and universities that may establish college partnership laboratory schools, and to provide that the State Board of Education shall give a substantial preference to any eligible HBCU (public or private) that seeks to establish a college partnership laboratory school. The Laboratory Schools represent a mechanism by which the Commonwealth may partner with eligible HBCUs and their potential students through the support of Laboratory Schools.

C. Financing for Private HBCUs through the Virginia College Building Authority

In addition to authorizing the General Assembly to appropriate funds for the benefit of students, the Constitution of Virginia authorizes the General Assembly to assist qualifying private HBCUs with borrowing to construct educational facilities. Specifically, Article VIII, § 11 of the Virginia Constitution provides that the General Assembly may create an agency or authority to assist qualifying private institutions of higher education "in borrowing money for construction of educational facilities at such institutions," provided "the Commonwealth shall not be liable for any debt created by such borrowing." The General Assembly created the Virginia College Building Authority, which "provides a conduit financing mechanism for [qualifying] private, non-profit institutions of higher education in Virginia," as well as serving as a financing tool for state institutions of higher learning.

In order to qualify under Article VIII, § 11 of the Virginia Constitution, the private, non-profit institution of higher education in the Commonwealth must have a primary purpose of providing collegiate or graduate education and not to provide religious training or theological education.

While the focus of your request is the permissible scope of state financial support for private HBCUs in Virginia, you also seek guidance on state financial support of public HBCUs in Virginia. On January 8, 2009, Virginia received the Final Report from the U.S. Department of Education, Office for Civil Rights ("Final Report") which "announce[d] that the Commonwealth's system of public higher education, once segregated by law, has eliminated the vestiges of that formerly segregated system and operates in conformity with Title VI, applicable U.S. Supreme Court precedent, and all other law and regulation." The Final Report does not end the Commonwealth's responsibilities and commitment to public HBCUs. The General Assembly has nearly unfettered authority to provide financial support for public HBCUs and all students that attend them. The General Assembly should seek to fund the Commonwealth's public HBCUs at high levels.

Both the state and non-state HBCUs are valuable and irreplaceable components of the Commonwealth's higher education system. According to U.S. News & World Report 2022 Best College Rankings, Virginia has four HBCUs that are listed in the top 50 HBCUs in the United States. In 2010, Hampton University celebrated the opening of the Hampton University Proton Therapy Institute (HUPTI) bringing with it a more precise way to target and kill tumors with limited side effects. HUPTI demonstrates the innovation and successes that HBCUs bring to the Commonwealth.

Conclusion

While the Constitution of Virginia, as a general matter, prohibits state appropriations to private colleges and universities in Virginia, it provides certain exceptions that permit the General Assembly to provide particular forms of support to such institutions. Under the terms of these exceptions, the General Assembly is authorized under the State Constitution to appropriate funds for the benefit of students in furtherance of collegiate or graduate education at qualifying private HBCUs. The General Assembly also is authorized to appropriate funds for the support of qualifying private HBCUs through properly procured public contracts. Moreover, the Constitution provides authority for the Virginia College Building Authority to assist qualifying private HBCUs in borrowing to construct educational facilities.

Finally, the General Assembly has nearly unfettered authority to provide state financial assistance to public HBCUs in the Commonwealth.

With kindest regards, I am,

Very truly yours,

Jason S. Miyares
Attorney General