By CityTownInfo.com Staff
February 20, 2009
Colleges and universities across the country are facing steep endowment losses, forcing schools to cut back on programs and scholarships and increase tuition.
The New York Times reports that Harvard University announced this week that it would slow expansion in a nearby Boston neighborhood as a result of a decline in the school's endowment. Officials expect the value of the university's endowment to drop by 30 percent this academic year. Additionally, the school announced a 3.5 percent increase in tuition, room, board and fees beginning this fall.
Virginia Commonwealth University is facing much the same situation. According to the Virginian-Pilot, the school lost 28 percent of its endowment's value within a year. The fund covers more than 200 scholarships, four endowed chairs, and travel and speaking fees for 20 notable lecturers.
"We've never seen anything like this," said Thomas Burke, executive director of the foundation.
Bloomberg.com reports that the Massachusetts Institute of Technology will freeze executive salary raises and cut back on hiring after the school's endowment fell about 25 percent. Susan Hockfield, president of the institution, announced that MIT will also raise tuition by 3.8 percent for the coming academic year. The school is planning to trim $50 million from its budget for fiscal year 2010.
"Achieving cuts on this scale requires more than simple belt-tightening," Hockfield said in the announcement. "It demands new ways of thinking about how we can work more effectively at lower cost."
A list of endowment losses at Big Ten institutions of higher learning appears on US News & World Report, ranging from Northwestern University's 14 percent drop to the University of Iowa's 29.35 percent loss.
According to a survey by the National Association of College and University Business Officers, endowment funds lost an average of 23 percent of their value within five months by the end of last November. The New York Times reports that all institutions, private and public, were affected by the downturn.
Nevertheless, school officials expressed confidence that in time, the endowments would rebound. "When you have this market fluctuation, 50 years from now, when you're looking at our returns, it will be a blip," said Alonzo Brandon, executive director of foundations at Old Dominion University, in the Virginian-Pilot. "A big blip, but a blip."