Pinched colleges squeezing their alumni
As the economic downturn shrinks endowments, big institutions may be affected more than smaller schools that rely more on fees. Officials try to strike a balance in the messages sent to graduates.
The first e-mail to alumni was encouraging: Syracuse University would be cutting costs but remained "solidly positioned" to weather the financial downturn, college president Nancy Cantor said in mid-November. In fact, a $1-billion college campaign was on track, with $600 million raised and $200 million earmarked for scholarships, she said.
Three weeks later, the mood had darkened: 400 students would have to drop out of school unless alumni contributed $2 million in emergency aid, Syracuse fundraising co-chairman Howard Phansteil warned.
"Without additional scholarship support -- they won't be back at SU in January," Phansteil said in the e-mail. "So please give now." The last two words linked to a page listing payment options.
A Syracuse spokesman said the campaign money was intended for long-term obligations, including future financial aid, while the scholarship appeal was for emergency shortfalls. Still, the mixed messages reflect the difficulty many colleges are having in responding to an economic dive that remains very much a moving target.
Walking a narrow ledge between reassurance and realism, college presidents and chancellors have struggled to assess the effect of a slow-motion slump that has no clear beginning or end. More than one president has sent out a relatively rosy assessment, only to follow up with news of cutbacks, hiring freezes and canceled projects.
"The severity of this and the universality has taken everyone by surprise," UC Berkeley Chancellor Robert Birgeneau said in a recent interview.
For public colleges, the financial crisis was immediate. With the state budget in disarray, both the California State University and University of California systems are looking at undergraduate student fee hikes of up to 10% for next year, and Cal State also will reduce its 450,000 enrollment by 10,000 students for the same period.
The plunge also delivered a sharp punch to some of the nation's wealthiest universities. With $8 billion in losses to its $36-billion endowment, Harvard recently announced a hiring freeze and suspended faculty searches. Yale's $23-billion endowment has lost 25% of its value since June, the college announced this week. It ordered cutbacks including deferring construction projects and restricting raises, travel and new hiring.
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