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Even Harvard Is Struggling Economically

From a grief-stricken Associated Press:

Amid poor economy, even mighty Harvard struggling

By RODRIQUE NGOWI, Associated Press Writer Rodrique Ngowi, Associated Press Writer – Tue Nov 11

BOSTON – Despite amassing an almost $37 billion endowment, Harvard University is warning that the economic slowdown has reached America’s richest university.

President Drew Faust said Monday the school is looking at ways to cut spending and will review compensation costs, which account for nearly half of the budget

The university is considering the steps because the economic slowdown may reduce federal grants and the school’s substantial endowment, Faust said.

“We need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial restraint,” she said… 

Dartmouth College has announced that it would cut spending after its endowment, which also makes up about a third of its budget, lost $220 million. Trustees blamed the loss on poor returns on stocks and bonds because of the Wall Street meltdown.

Last week, Brown University announced a hiring freeze through January and said it would review its capital budget to determine which projects could be delayed. Cornell University also recently announced a 90-day halt of construction projects and a pause on hiring staff members from outside the university through the end of March…

Faust’s spokesman declined to say much Harvard’s endowment has lost during the current economic turmoil.

Faust noted in an e-mail to faculty, staff and students that Moody’s, the financial research and ratings service, has projected a 30 percent decline in the value of college and university endowments in general in this fiscal year. If that were applied to Harvard’s endowment it would mean a drop of $11 billion, but because Harvard’s endowment is so large and so diversified it is more insulated from market volatility.

In the fiscal year that ended June 30, Harvard’s endowment posted an 8.6 percent return and grew to $36.9 billion. However, the school lost 12.7 percent on its U.S. stock portfolio and 12.1 percent on its foreign equity portfolio during that time.

Faust warned in her e-mail that “we must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered.” …

Gosh this is horrible.

Luckily Mr. Obama has already talked up his bailout programs for higher education.

This article was posted by Steve on Tuesday, November 11th, 2008. Comments are currently closed.

11 Responses to “Even Harvard Is Struggling Economically”

  1. proreason says:

    Tuition is going up $4K as soon as the Obamy Brownshirts program kicks into gear.

    Courtesy of the taxpayers.

    That’ll hold em until the higher education bailout.

  2. Anonymoose says:

    My first thought is—-so what what else is new? Universities have been stuck for a couple of decades now in financial doldrums where the tuition keeps going up but somehow they’re so broke they can barely pay their staff. Hiring freezes, wage cuts/caps, it’s all par for the course.

  3. Sharps Rifle says:

    Boo-frickin’-hoo. Let them ask the CPUSA for money since their curriculum is right out of Marx. If they ever provided a real education to REAL students, and not just to trust-fund babies and affirmative action admissions, I might think differently. As it is, let Harvard fall…and good riddance.

  4. pinandpuller says:

    Blah blah blah…time to send out fund raising letters.

  5. Liberals Demise says:

    Overpaid Left weenie commie professors looking for a hand out from Uncle Sugar? Yes we have no bananas!!! Choke and puke, Oh bastion of Lawyers!!

  6. crosspatch says:

    Colleges are going to be in a world of hurt. A lot of college tuitions were paid for with home equity loans. A lot of that home equity is gone in areas hardest hit (which previously were areas with the most appreciation-based equity).

    Still, I am not all that impressed with Harvard complaining they have lost 13 percent of their $37 BILLION dollars. With money like that, why the heck are they even charging tuition? Oh yeah, to keep out the riff-raff. I forgot.

  7. Colonel1961 says:

    I guess they could spend some of the principle? Or raise tuition. I dare say that only twenty percent of the student body could rationalize the net present value of their expenditure…

    And they can’t even be in Skull & Bones!

  8. crosspatch says:

    Makes one wonder what the purpose of an endowment is if not to use it for something. It seems they simply want to grow it larger and larger. There is probably some prestige among such institutions over how well endowed they are. Maybe women should run those schools.

  9. JohnMG says:

    ….”And they can’t even be in Skull & Bones…..”

    What a deft stroke, Colonel. But as far as I can tell, a lot of their graduates are “well endowed”. Just look at some of the Harvard graduates and I’m sure you’ll find some of the biggest p***ks you’ve ever seen.

  10. bousquem says:

    Some how whining about how you have 37 billion and not spending it before but now your in a crunch is not winning any sympathy from me. And you want to bet they’ll raise tuition even more to keep the money in the bank they aren’t even using? Oh cry me a river about how they will only have 26 billion sitting around. I’d love to have 26 thousand sitting around, pay for a couple of years student loans.

  11. proreason says:

    With all of Obamy’s enthusiasm for re-distribution, why isn’t he grabbing the $37B to pay off his constituents? In this one case, it would be a better use of the money.

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