"I am struck by the acceleration of the economic challenges that have a direct impact on Vassar's budget," wrote College President Catharine Bond Hill in her campus-wide e-mailed update on Vassar's finances and budget for next year. Indeed, the speed of the economy's decline has necessitated swift reactions from the College's administration throughout the year.
Of course, Vassar is not suffering in a proverbial vacuum. The budget for 2009-10, which was approved by the Board of Trustees at the end of February, reflects logic and budgetary changes similar to the College's peer institutions. Hill laid out some of the highlights of the budget in her email, and Vice President for Finance and Administration Elizabeth Eismeier added detail in a later email about student charges on March 30.
Although endowment sizes differ, most peer institutions, including Vassar, have lost or expect to lose 30 percent of their endowment by the end of the fiscal year at the end of June. Vassar's reaction to this loss does stand out from its peers in the short term. While most are cutting their draw from their endowment immediately for the 2009-10 school year, Vassar is actually increasing its draw by 2 percent to $51.65 million.
"We recognize that this level of support from the endowment is unsustainable in future years," wrote Eismeier in her letter, "but it provides time and opportunity for careful planning to gain efficiency as we decrease spending from the endowment in subsequent years."
Wesleyan University, which had already reduced its budget by 22 percent for the 2008-09 year, is reducing it a further 10 percent from $208 to $188 million. In an article for the Wesleyan Argus, Wesleyan President Michael Roth said that for every $25 million Wesleyan's endowment loses in value, the University must decrease its budget by $1.75 million.
Williams College similarly will reduce its budget for next year from $92 million to $78-80 million. Swarthmore College will draw six percent of its endowment next year, which represents a larger percentage draw if not a larger sum after its loss in value. Amherst College will reject these predictable decreases altogether with the ultimate reduction: not drawing from its endowment at all next year. Instead, it has issued a $100 million bond with the logic that the expenses of the loan will in the end amount to a smaller loss than the liquidation of assets.
Like Vassar, most institutions have also put pay freezes in place, at least for employees earning over $50,000. At Middlebury College the President's staff will actually receive pay cuts.
In her letter Eismeier specified that in addition to pay freezes Vassar will be reducing its work force by three percent for next year with the ultimate goal of reducing employment by 10 to 15 percent by 2011-12. Eismeier wrote in her letter that the decrease for next year will occur, "by leaving vacant positions unfilled, encouraging retirement in some areas and limiting layoffs to a small number in areas where we can and must become more efficient."
For now retirement incentives appear to be aimed at non-faculty employees. Hill wrote in her email, "We have offered a new retirement incentive for which 65 staff members are eligible, in addition to a previously negotiated retirement incentive for [Service Employees International Union] SEIU members, for which 29 service employees are eligible."
Eismeier also clarified in an emailed statement, "Faculty retirements this year are following normal procedures. No new incentives were put in place that would affect retirement planning by faculty, although consideration is being given to changing faculty retirement procedures for future years."
Eismeier did not specify precisely which areas would be experiencing real layoffs, but did acknowledge that many contracts will not be renewed after they end. Similarly, few of the College's peers currently plan to institute layoffs, opting for employment reductions through natural attrition and retirement incentives.
"Decisions about leaving positions vacant and the small number of layoffs were based on an assessment that critical functions could be performed at lower staffing levels," she further wrote. "Senior officers performed these assessments, consulted with department heads, Human Resources, and justified their evaluation of staffing levels."
She laid out multiple areas that have been affected by changes, noting that the list does not necessarily include every single one as planning continues. "We do not think it is productive to focus on the very small number of departments with layoffs, since the burden of staff reductions among non-faculty positions has been felt in quite a wide range of departments, including Accounting Services, Alumnae House, Buildings and Grounds, Career Services, College Relations, Computing and Information Services, the Dance program (administrative support, not teaching), the Dean of the College office, the Dean of the Faculty office, Development, Faculty Housing, Grants Office, Human Resources, the Library, Post Office and Security," she wrote.
According to Eismeier, "When you consider the salary guidelines, overtime restrictions, position changes and operating budget reductions, every office in the College is playing a role."
Although Eismeier's letter provided some comprehensive and detailed information about the budget, its focus was on student charges, which include tuition and other fees such as room, board, and health service and activities fees. The entirety of charges will increase by 4.5 percent, though Eismeier noted, "This is the lowest percentage increase in the comprehensive fee in nine years, but an increase that the President and the Board of Trustees deemed necessary to maintain core programs and services." This is a pattern that can also be seen at other colleges. For example, Swarthmore will increase its student charges by 3.76 percent, which represents its lowest percentage increase in 10 years.
The increase will come with a heightened sensitivity for the needs of current students and with an expectation of increased need in the incoming class, "The operating budget for 2009-10 includes a significant increase in the allowance for financial aid," wrote Eismeier.
"The budget plan holds to our commitment to making a Vassar education available to talented students from all socio-economic backgrounds," wrote Hill. "It also takes into account our obligation to meet the demonstrated need of all Vassar students once they enroll."
Hill also emphasized this position during her visit to a Vassar Student Association Council meeting on March 29, in which she stood by the College's commitment to need-blind, at least for now. "Until we get the results on the class for next fall…we won't know what's going to happen with our budget for next year," she said. "I'm hopeful that it'll come in at a level that we can hang on for another year."
She stated that moving away from need-blind would only reduce the portion of the student body that receives aid, "unless we move away from full need, which we would never do."
Whether or not they are currently need-blind, peer institutions have generally recognized that now is not the time to greatly reduce or limit their financial aid policies. Middlebury sets an example of a sort of compromise. It has eliminated its need-blind policy for international students. It will raise its work expectations during the summer and academic year for domestic students. While Vassar had begun considering a need-blind policy for international student before the crisis, that plan has been tabled for the time being. Swarthmore remains committed to loan-free aid, which was a new policy this year.
Hill's letter did suggest that some optimism has been worked into the budget. "The budget assumes an increase in the Annual Fund, reflecting our hope that Vassar alumnae/i and friends of the College will give whatever they can to help the College through this difficult period," she wrote. This optimism may prove dubious in a difficult year for fundraising, though a recent article in the Miscellany News ("Vassar officials worry over recent economic downturn," 9.24.08) noted the development office's commitment to meet the College's goals at a crucial time.
Though some trends can be applied to many colleges, each institution is also working on some solutions specific to their needs and programs. Williams created an Ad Hoc Budget Advisory Committee, which met for the first time on March 3. Vassar's Ad Hoc Committee on Allocation of Faculty Resources (AHCAFR) will provide a similar, albeit more focused, guidance for navigating the current economy.
Wesleyan and, to a smaller degree, a few other schools are increasing their enrollments. The University will attempt a net gain of 120 students over the next four years, gaining $4 million per year in revenue. Middlebury will likely reduce their "course release" program, which exempts some professors from teaching a certain number of courses in exchange for doing other academic work beneficial to the college. In this way, the school could actually gain courses and not have to cut staff by any means but attrition.
Just as it shows similar budgetary changes to its peers, the increased draw on the endowment suggests that Vassar is also taking the time to look at its specific case and areas that could use long-term improvement or restructuring. "The current financial realities require us to respond swiftly but thoughtfully," wrote Hill. "In our response to these circumstances we have an opportunity to deepen our commitment to serving the best interests of our students and thereby to strengthen the institution."
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