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UVA fired and rehired its president 10 years ago, fearing a crisis that never materialized

Former University of Virginia President Teresa Sullivan was pushed out of her job 10 years ago by the board of visitors.

In the days that followed, the university community came to Sullivan’s defense as thousands signed a petition to reinstate her, and school deans, the faculty senate and the provost took her side, claiming the board didn’t understand how higher education should function.

Outsiders questioned the lack of transparency in the sudden firing, conducted without a vote and any support for her firing eroded.

At one point, Gov. Bob McDonnell demanded a final decision — choose a path forward or he would demand the resignation of the entire board.

On June 26, 2012, 16 days after her removal, the board gathered in the Rotunda and reinstated Sullivan. It was two weeks of negative press for UVa and one of its largest sources of turmoil in a generation and largely based on the fear of a crisis that never materialized.

The crisis was a national drop in enrollment, rising tuition and the increasing emphasis on online courses for the large numbers of students across the country.

Helen Dragas, the rector, or head of the board of visitors, claimed Sullivan was unprepared for the future awaiting UVa. She asserted that its long-term financial health, the role of technology and the type of classes the school offered required major adjustment.

Sullivan, who dubbed herself an “incrementalist,” was unwilling to deliver the speedy and major changes Dragas deemed necessary.

In hindsight, the fears were unfounded. Ten years later, there have been substantive changes in the university. The price of tuition has ballooned. Enrollment has grown and the machinations of UVa’s accounting system have been altered, but a monumental shift hasn’t occurred.

Online education never came to dominate the curriculum, despite the pandemic forcing the university’s hand for more than a year. Liberal arts studies remain popular. The university’s financial health remains strong and UVa is more popular than ever with a record 50,000 applications this year.

In terms of finances, the university seems to be reaching its potential. Its endowment surged 50% in 2020 and 2021 and was valued last year at $14.5 billion. The school is flush with applicants, new buildings continue to go up, and it continues to receive multimillion-dollar donations.

“The fears of an existential crisis that were reported in some quarters did not materialize,” Sullivan, who still teaches sociology at UVa, said in an email to the Richmond Times-Dispatch. “UVa was, and is, strongly positioned to withstand many shocks to higher education.”

In 2012, that wasn’t a sure thing. The shocks to the industry of higher education were obvious. The recession of 2008 had caused lower tax revenue, leading universities to cut back. Faculty salaries lagged and state funding was drying up.

In the 23 years before Sullivan’s firing, state contributions to UVa shrank from 26% to 6% of its budget and a $3 billion capital campaign came up $400 million short.

At the board’s behest, UVa hired an independent firm, Art & Science Group LLC, to assess the university’s big-picture performance. The firm described a “broken business plan” in which revenue sources became stressed, better-funded private colleges were challenging public schools for faculty, and technological innovations might have been leading to a revolution in how education was delivered.

The school needed significant change, the firm determined, and it had to rethink the content of an undergraduate education.

UVa needed to develop online classes and monetize them, some board members believed. Stanford and Harvard had made inroads on virtual learning, and massive open online courses — classes in which anyone could enroll — were gaining popularity.

Sullivan was not against change. She eventually remodeled university finances, gave deans incentives for meeting revenue goals and saving costs but she wasn’t changing things as quickly or as meaningfully as desired by Dragas, a Virginia Beach real estate developer and president of the Dragas Companies.

So on a Friday in June, a month after the semester had ended and most students had gone home, Dragas and vice rector Mark Kington visited Sullivan in her office in Madison Hall.

With a few high-powered donors were on their side, and what Dragas claimed was enough votes on the board to fire her, Dragas handed Sullivan a separation agreement and gave her 24 hours to sign.

Sullivan agreed and, two days later, Dragas announced the president had resigned, calling the decision mutual. UVa needed a leader capable of creating a strategic plan to “re-elevate the university to its highest potential,” Dragas said that day.

The whole Board of Visitors was not involved, however. Vincent Mastracco Jr., a board member at the time, Mastracco said he didn’t know of the plot to remove Sullivan until it became public.

Sullivan’s ousting was never discussed in a board meeting and Dragas instead communicated in one-on-one conversations, avoiding the legal requirement of an official meeting.

“It was a very unfortunate blip to which those of us who were there had to take responsibility,” Mastracco said last week. “And I certainly took the responsibility publicly of saying there was a major mistake that was made perhaps on information that wasn’t fully understood.”

The crisis that wasn’t

Members of the board reportedly wanted Sullivan to cut programs that were underperforming, such as classics and German, and to focus on science, technology, engineering and math, or STEM.

It didn’t happen. Today about one in three degrees conferred are in STEM and health, about the same as a decade ago.

The hyped advent of massive open online classes also did not occur, even though elite schools like Harvard and Stanford were beginning to offer not-for-credit courses open to the general public.

They have not flourished.

“They were huge television shows for the public,” said Siva Vaidhyanathan, director of UVa’s center for media. And, ultimately, they were “a spectacular failure.” Those schools have since scaled back their efforts.

UVa partnered with Coursera, a company that provides massive online courses and, after politics professor Larry Sabato wrote a book about the life and death of President John F. Kennedy, Sabato taught one.

“For a while, people were saying ‘this is the future,’” Sabato said. “After I did one, I knew it wasn’t the future.”

Online classes are still not the norm at UVa despite the pandemic forcing the university to go online for three semesters. Teachers and students held discussions over videoconferences, and professors recorded lectures as podcasts. Sullivan called it an “unplanned experiment.”

Once social distancing measures were relaxed, students preferred seeing their professors and classmates in person and most courses returned to the classroom.

Respect for UVa and its draw to potential students did not dwindle.

In ranking, UVa remains near the top, slipping in a decade from second to fourth in public school ranking by U.S. News & World Report. While rankings are far from definitive statements about a university’s quality, they remain hugely influential to college administrators.

Another ranking that matters very much to UVa: The Princeton Review named UVa the No. 1 school for financial aid.

Tuition was one reason cited in Sullivan’s fall and rise. In higher education, there’s no such thing as a tuition decrease. Each year, it either goes up or stays the same.

At UVa, tuition has risen 45% in the past decade, well beyond the rise of inflation and wages. The cost for an in-state undergraduate was roughly $30,000 last year. UVa plans to raise tuition 3.7% this year, but Gov. Glenn Youngkin is trying to intervene.

To keep UVa accessible to middle- and lower-income students, UVa pledges to meet the need of every student via scholarships, work-study and loans. Essentially, the wealthy families pay for the low-income ones.

But students with great need make up just a slice of the school’s population. At UVa, 14% of students are eligible for low-income Pell grants, a smaller share than most state colleges but more than the Ivy League schools to which UVa compares itself, schools with tuition twice as expensive as UVa’s in-state rate.

Many UVa students come from wealthier families, so fewer borrow money for their education. For those who do, the average debt is $26,000. Issues such as debt and a lack of socioeconomic diversity among students “continue to bedevil UVa,” Dragas said last week in an email to The Times-Dispatch.

A phrase Dragas emphasized in the past was “affordable excellence.” In the past decade, it’s clear UVa has maintained its excellence. Whether it’s affordable depends on whom you ask.

UVa also grew revenue by growing enrollment. The student population has increased 9% in the past decade to 26,000. Sullivan frowned on enrollment growth a decade ago, saying there is huge value in UVa’s relatively small size. Elite institutions have generally resisted growing their student populations, deciding exclusivity is a component of their elite status.

The school’s growth, Sullivan said last week, was slow enough to allow UVa to hire instructors and staff to support the new students and hasn’t dented its reputation.

UVa’s reputation makes it prosper as other colleges lose students. College enrollment is down nationwide. Radford University and Longwood University have seen drops in excess of 20% in the past four years. Community colleges, which largely serve low-income students, have lost a quarter of their student populations in the past decade.

By and large, UVa believes it is immune to many market forces. In higher education, some colleges get a cold, and some get pneumonia, Sabato said. “UVa will almost always only get a cold.”

Two weeks of controversy

On June 26, 2012, 16 days after her removal, the board gathered in the Rotunda and reinstated Sullivan. It was two weeks of negative press for UVa and one of its largest sources of turmoil in a generation and largely based on the fear of the crisis that never materialized.

When she left the Rotunda, a crowd of more than 1,000 faculty, students and alumni waited. She told them that the board’s change of heart was a sign of strength and deliberation.

Days later, McDonnell reappointed Dragas to the board, where she stayed another four years. In interviews at the time, she said the board had done the right thing the wrong way. She offered a similar sentiment last week.

“It is good governance for any organization of such significance and large public investment to follow a disciplined process for assessing its strengths and weaknesses, potential internal and external risks and its capacity to address them should they materialize or intensify,” Dragas said.

“The board’s actions in 2012 were driven by the administration’s steadfast refusal to create a long-overdue strategic plan,” she said.

After her reinstatement, Sullivan developed a blueprint for UVa’s future, including the new financial model that motivates deans to consider their own schools’ finances.

Vaidhyanathan and Sabato claim victory for Sullivan, saying time has proved her right. They criticized Dragas for trying to run a university like a business, instead of in the deliberate and incremental way a college should operate.

Dragas has responded by saying the university has put rankings ahead of Virginians and that universities run themselves as “private academic playgrounds.”

Near the end of her tenure, the board learned UVa had a $2.3 billion pot of reserves, surpluses and earnings sitting untouched.

Dragas called it a slush fund — money that could have been used to lower the cost of tuition.

Still, Sullivan survived in the presidency long enough to make needed changes, stepping down from the office in 2018. Her style of leadership was much different than that of her predecessor, John Casteen, one former board member said. Casteen was a top-down, hands-on kind of leader.

Sullivan was the opposite. She accepted input and built consensus, which may have led to friction with the board. Her style welcomed the voices of others.

In the end, that could be why faculty, alumni and students rallied behind her and why her job was ultimately was saved.


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