You hear the comment all the time, "that athlete is on a full scholarship" or "I hope we have enough scholarships available to offer a full ride to that recruit." But really, what does that mean? What exactly is a scholarship, how do they work, and why are they so important for Virginia Tech Athletics?

What is a scholarship and how does it work?
A scholarship is a donation to a larger endowment, and in the case of Virginia Tech Athletics, the endowment is called the VTAF Endowment. The corpus, or the actual monetary value of the VTAF Endowment, is invested and the interest earned each year goes to pay a portion of the scholarship bill. Each donation to the VTAF Endowment is earmarked so that individuals that make the donation can specify their preferences towards the awarding of their scholarship, based on the amount of money they have donated and their scholarship is awarded each year.

How much is required to create a scholarship?
The minimum amount allowed by the university to create a scholarship is $50,000. There is no maximum limit on a scholarship; however, and additional funds can be added to the scholarship moving forward at any time. In addition to this minimum level, we have what's called a Position Scholarship, which can be created with a gift of $150,000.

How much guidance does someone have when creating a scholarship?
If someone wants to create a scholarship, a fund agreement is created and the person is allowed to name the scholarship. They are also given the opportunity to provide preferences towards the criteria for awarding the scholarship. Guidance is given with these two items by the Hokie Club and University Development. Once a scholarship has been created and funds are available, scholarships are awarded in April for the next academic year. Once established, this process will continue in perpetuity.

Does Virginia Tech Athletics earn enough interest to fully pay the scholarship bill each year?
Surprising to many people, the answer to this question is no. In fact, Virginia Tech, like most athletics departments in the United States, does not generate enough interest from the corpus of the VTAF Endowment to fully pay the scholarship bill. Each year, the percentage of interest generated from each donor's investment, usually around 5%, is applied towards the scholarship bill, whereas the amount donated is actually never spent. Currently, the VTAF Endowment stands at $35.3 million, so roughly 17.5% or 1.7 million has been applied towards the scholarship bill for 2011-12 which totaled $10.3 million.

So, where does the rest of the money come from to pay the annual scholarship bill?
As we have said many times, the Annual Fund and each member's annual donation to the Hokie Club really is very important to Virginia Tech Athletics. Each year, roughly 10,000 members make annual donations to the Hokie Club, and in return they receive benefits such as the opportunity to purchase or renew season tickets for football and basketball, opportunities to purchase parking for the football season, and other benefits. However, what should not be lost is that the money being donated is being used to pay the remainder of the scholarship bill for our approximately 500 student-athletes.

How does the future look?
The cost of tuition has steadily risen over the past few years. Luckily, we have great support from our Hokie Club members and we have been able to combine the amount of money generated from scholarships with money from our Annual fund to pay the scholarship bill. However, as scholarship bills continue to rise, we need to increase our support. If you are interested in learning more about how scholarships work or would like to talk with someone about creating a scholarship for intercollegiate athletics, please call the Hokie Club Office. If you want to help, but creating a scholarship is not in the cards right now, please continue to support the Annual Fund by making your yearly Hokie Club donation. And, if you want to do more for the Annual Fund, we hope you will consider upgrading your membership.

For more information on athletic scholarships, contact the Hokie Club office at (540) 231-6618.