As the College has been working to formulate a response to a financial crisis that has sent endowment values plummeting, similar conversations have been taking place on college campuses all over America. Even in the small and relatively homogenous world of selective private institutions, the crisis is presenting a variety of challenges and is eliciting a variety of responses.
In an e-mail sent to the campus on Oct. 18, President Schapiro acknowledged that the financial crisis was likely to change some aspects of Williams life, but pledged the continued support of the College to financial aid. He also promised that the faculty and staff currently employed by the College would not face layoffs. He announced, however, that Williams would postpone renovation projects, cut spending, possibly grow the size of the student body to increase revenue and would “not fill newly open positions except those deemed most essential.” In conversations with the Record, Schapiro estimated the current value of the endowment, which began the fiscal year at roughly $1.8 billion, at $1.3 billion.
At Amherst College, a school often closely compared to Williams, President Tony Marx sent out an all-campus e-mail on Oct. 28 in which he reported that “the endowment has lost roughly a quarter of its value since June 30,” the end of the last fiscal year. At that time Amherst had an endowment of $1.66 billion which is likely near $1.2 billion now to support its 1,685 undergraduates. “We will make some adjustments in spending,” he wrote, although his e-mail contained few specifics about what that would mean.
Like the College, Amherst is postponing a construction project: a planned renovation of its Lord Jeffrey Inn, which Marx described as a “major non-core investment.” Marx also described an attitude toward hiring similar to the line Williams has taken. “Though we are not considering a hiring freeze, the College will review with greater stringency all requests for replacement or additional positions,” he wrote.
Middlebury President Ron Perlstein struck a similar note in a “Q & A” he posted online about the crisis. Middlebury has one percent of its endowment, approximately $9 million, invested in the short-term fund administered by Wachovia Bank that the bank recently announced was not sufficiently liquid to allow colleges and universities to withdraw more than 10 percent of the money they have invested in the fund. The assets are currently believed to be secure.
Perlstein wrote that Middlebury would not add students, “but will institute, effective immediately, a hiring freeze on all but the most essential staff positions.” Perlstein did not entirely rule out the possibility of staff layoffs, although he called this option “among the last we would pursue.”
At Brown University, the conversation has focused more directly on students who are likely to be hurt themselves by the financial crisis. Brown’s Provost, David Kertzer, announced last Friday that Brown was taking temporary steps to relax its requirements that students pay their term balances. Kertzer wrote that Brown decided to remove its requirement that students have an outstanding fall term balance of under $1,000 in order to pre-register for spring classes. Furthermore, the amount of money a student can owe to the University and still continue at Brown was raised from $5,000 to $7,500, although late fees would continue to accrue at the usual rates.
Unlike Williams, Brown also has to support a large complement of graduate programs. In June, before the present turmoil, Williams had an endowment to student ratio of approximately $900,000 while Brown’s was about a third of that, at about $330,000. In her general remarks to the University, Brown President Ruth Simmons did not treat the specifics of Brown’s financial position in much detail. Instead, she stressed the fact that “the near-term outlook for the university is stable.”
Other highly selective schools, such as Bard College, will face even starker choices. Bard last reported an endowment of $207 million, a number is likely to have shrunk in the market contraction, and is highly dependent on annual giving to support its activities. In an e-mail interview, Bard’s President Leon Botstein wrote that “these activities [of the College], as well as our initiatives in the arts, need to be continued despite the downturn and the crisis. That makes the challenge to us one of maintaining annual philanthropy.” This sort of fundraising, however, will likely prove to be a greater challenge in a recession than it has been in better years.
But college presidents are in the business of education, after all, and Botstein draws a bitter lesson from the uphill battle he and others are likely to face in the next year: “this economic crisis is an opportunity in a painful disguise to reconsider now outmoded pieties about the role of government in relation to its citizens, particularly on the matter of financing of higher education.”
Additional reporting by Jared Quinton, assistant news editor.