Colleges in Dire Financial Straits

[polly_mer]

That's pretty funny, dismalist.

A serious answer comes from Cornell.. There's still a healthy dollop of "we're not really rich", but it also has details.

[apl68]

Henderson State University is trying to explain to legislators that its CARES funding is still not enough to cover their virus-related shortfalls in revenues:


https://www.nwaonline.com/news/2020/may/18/hsu-needs-funds-system-chief-insists-20/


They were at some pains to point out that half of the CARES funding has to go direct to students, which apparently some still don't understand.

[mamselle]

I don't think this was posted yet...

   https://abc6onyourside.com/news/local/ohio-wesleyan-cutting-10-million-in-staff-programs-and-other-cuts

M.

[Wahoo Redux]

Henderson State University is trying to explain to legislators that its CARES funding is still not enough to cover their virus-related shortfalls in revenues:


https://www.nwaonline.com/news/2020/may/18/hsu-needs-funds-system-chief-insists-20/


They were at some pains to point out that half of the CARES funding has to go direct to students, which apparently some still don't understand.

Same situation we are in.

[polly_mer]

Henderson State University is trying to explain to legislators that its CARES funding is still not enough to cover their virus-related shortfalls in revenues:


https://www.nwaonline.com/news/2020/may/18/hsu-needs-funds-system-chief-insists-20/


They were at some pains to point out that half of the CARES funding has to go direct to students, which apparently some still don't understand.

Same situation we are in.

I expect many institutions are in the position of having a big gap that even the full CARES funding wouldn't cover and the student half of CARES funding cannot be used to the institution for institutional expenses incurred by students per point 1 on the official FAQ.

Once again, outsiders see a big number and even that big number is nowhere near enough once the details roll in.

[apl68]

I don't think this was posted yet...

   https://abc6onyourside.com/news/local/ohio-wesleyan-cutting-10-million-in-staff-programs-and-other-cuts

M.

They're eliminating 44 non-teaching positions and encouraging early retirements among faculty.  But not at this time threatening to lay any faculty off.  Looks like they're taking aim first at administration, broadly defined.

[polly_mer]

More background on Missouri Western State from CHE

[Diogenes]

Northern Arizona University in Flagstaff about to cut a bunch of faculty positions

https://azdailysun.com/news/local/jobs-lost-as-nau-slashes-budgets-for-fall-semester-due-to-coronavirus/article_d40daf4e-4464-51e8-abaf-1ada41aa8cd3.html

[stemer]

That's pretty funny, dismalist.

A serious answer comes from Cornell.. There's still a healthy dollop of "we're not really rich", but it also has details.

I am now confused about how endowed positions work. From the article:

"If endowment spending drops a lot, the University is up a creek. [For example], if I am a professor whose salary is covered by endowment spending, and endowment spending drops, the University has to come up with salary money elsewhere," Ehrenberg said. "Rather than have wild fluctuations in endowments, it is better to have a smooth path."

Are they saying that an endowed professor's salary is not covered in perpetuity by the original gift (and its growth, compound interest and all) but depenbds on new annual endowment giving?
How can this be?

[TreadingLife]

That's pretty funny, dismalist.

A serious answer comes from Cornell.. There's still a healthy dollop of "we're not really rich", but it also has details.

I am now confused about how endowed positions work. From the article:

"If endowment spending drops a lot, the University is up a creek. [For example], if I am a professor whose salary is covered by endowment spending, and endowment spending drops, the University has to come up with salary money elsewhere," Ehrenberg said. "Rather than have wild fluctuations in endowments, it is better to have a smooth path."

Are they saying that an endowed professor's salary is not covered in perpetuity by the original gift (and its growth, compound interest and all) but depenbds on new annual endowment giving?
How can this be?

I haven't served on an endowment committee, but it is my understanding that the value of the endowment isn't taken at one point in time. Rather, the draw rate is applied to a moving average of the endowment's value. So if the value of the endowment dips, this pulls down the 6 or 12 month moving average of the endowment, even if the endowment "rebounds" in a future month. I believe there are restrictions on how much a school can draw from an endowment in terms of being fiscally responsible and sustainable. So if your draw rate is 4 or 5%, and the endowment balance dips due to a dip in the stock market, the 4 or 5% you can withdraw nets you a smaller absolute dollar amount.

This is my guess. I could be wrong. I agree with you though. I did not think that endowed positions were based on 'soft money'.

[marshwiggle]

That's pretty funny, dismalist.

A serious answer comes from Cornell.. There's still a healthy dollop of "we're not really rich", but it also has details.

I am now confused about how endowed positions work. From the article:

"If endowment spending drops a lot, the University is up a creek. [For example], if I am a professor whose salary is covered by endowment spending, and endowment spending drops, the University has to come up with salary money elsewhere," Ehrenberg said. "Rather than have wild fluctuations in endowments, it is better to have a smooth path."

Are they saying that an endowed professor's salary is not covered in perpetuity by the original gift (and its growth, compound interest and all) but depenbds on new annual endowment giving?
How can this be?

I haven't served on an endowment committee, but it is my understanding that the value of the endowment isn't taken at one point in time. Rather, the draw rate is applied to a moving average of the endowment's value. So if the value of the endowment dips, this pulls down the 6 or 12 month moving average of the endowment, even if the endowment "rebounds" in a future month. I believe there are restrictions on how much a school can draw from an endowment in terms of being fiscally responsible and sustainable. So if your draw rate is 4 or 5%, and the endowment balance dips due to a dip in the stock market, the 4 or 5% you can withdraw nets you a smaller absolute dollar amount.

This is my guess. I could be wrong. I agree with you though. I did not think that endowed positions were based on 'soft money'.

I don't know either, but thinking of what you've just pointed out, it would seem obvious that an "endowed chair in Basketweaving" would have to have its salary smoothed out by general funds since the amount vailable from year to year would fluctuate, while the salary would presumably follow the pattern of the rest of the institution.

[Parasaurolophus]

I just heard from a friend that Texas Christian University has decided to cut "a large number" of its library's online subscriptions. The university has urged faculty to get their research done ASAP, but hasn't said which subscriptions are getting axed. =/

(I assume it's because they didn't bother coordinating with the library before announcing it.)

[apl68]

University of Arkansas is implementing significant budget cuts in expectation of declining revenues.  Tuition will not be raised to cover deficits, but through a combination of hiring freezes, drawing on reserves, and past conservative budgeting practices they are hoping to avoid layoffs.


https://www.nwaonline.com/news/2020/may/22/ua-system-approves-tighter-budgets-2020/


System President Donald Bobbitt is quoted at the end as saying that they've been preparing for a rainy day, "and it's rainy."

[apl68]

I just heard from a friend that Texas Christian University has decided to cut "a large number" of its library's online subscriptions. The university has urged faculty to get their research done ASAP, but hasn't said which subscriptions are getting axed. =/

(I assume it's because they didn't bother coordinating with the library before announcing it.)

The university may have told them on short notice to cut X amount of budget, and the library decided that this would necessitate cuts in online subs--but hasn't yet had time to make the decisions about what to cut.

[Vkw10]

I just heard from a friend that Texas Christian University has decided to cut "a large number" of its library's online subscriptions. The university has urged faculty to get their research done ASAP, but hasn't said which subscriptions are getting axed. =/

(I assume it's because they didn't bother coordinating with the library before announcing it.)

The university may have told them on short notice to cut X amount of budget, and the library decided that this would necessitate cuts in online subs--but hasn't yet had time to make the decisions about what to cut.

My university library is doing planning for serials cut. They  told us renewal decisions get submitted in early September for subscriptions that start January 1. They don't have budget yet, so they've posted three lists of possible cuts, depending on budget.