<p>Wesleyan posts an update on things… a sobering explanation as to why Wesleyan has fallen behind, where in fact was positioned 25 years ago to become the leader in LAC endowments. President Roth also sent out an email detailing all of this. </p>
<p>[Wesleyan</a> 2020 Wesleyan?s Endowment](<a href=“http://2020.blogs.wesleyan.edu/endowment/]Wesleyan”>Wesleyan’s Endowment – Wesleyan 2020)</p>
<p>the graph at the bottom is particularly telling</p>
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<p>I’m intrigued by the wide disparity in the levels of transparency various colleges are giving into their cost-cutting efforts. I know that there can’t be a college or university in the country that hasn’t spent all of the last 12 months making hard decisions about long-term spending plans. Yet, there are many schools that haven’t issued a public statement for a year now.</p>
<p>I have to give credit to the schools that are providing sufficient information to understand what they are doing.</p>
<p>mini - Your theory on Swarthmore being an outlier rather than Williams is quite interesting. ID also compiled data on Pomona IIRC, which was closer to Swat than to Williams; I wonder if the same could be done for schools like Amherst, Middlebury, etc.</p>
<p>[U</a>. endowment projected to rise by 10 percent during FY2010 - The Daily Princetonian](<a href=“http://www.dailyprincetonian.com/2010/02/10/25090/]U”>http://www.dailyprincetonian.com/2010/02/10/25090/)</p>
<p>“I wonder if the same could be done for schools like Amherst, Middlebury, etc.”</p>
<p>See post #618.</p>
<p>Actually, Williams and Amherst are the outliers in managing to get virtually zero revenue from their international cohort. The other schools I looked at had much closer spreads:</p>
<p>Grinnell (11% international):</p>
<p>$18,501 - Average per student revenue (international)
$27,488 - Average per student revenue (domestic)</p>
<p>Pomona (4% international):</p>
<p>$29,420 - Average per student revenue (international)
$32,131 - Average per student revenue (domestic)</p>
<p>Smith (8% international):</p>
<p>$25,082 - Average per student revenue (international)
$33,553 - Average per student revenue (domestic)</p>
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<p>Amherst and Williams are the only two LACs need-blind for internationals, IIRC. (A distinction that only Amherst still holds.) Middlebury was briefly for maybe a few years? The ^comparisons to intl-need-aware LACs seem to correlate with the theory that going need-blind for internationals results in a significantly lower average net revenue compared with need-sensitive while still enrolling some internationals on aid.</p>
<p>I have no idea how they calculate aid for internationals, but face it, it’s not like they are submitting us tax returns that would have them risking a little time in a US prison if they defrauded the government.</p>
<p>Interestingly, “need-blind” for US students does NOT correlate with low per student net revenues. Just the opposite, in fact. The need-blind schools tend to be among the highest in per student net revenues because they tend to be the high demand, high SAT, highly selective schools that attract affluent applicants.</p>
<p>I honestly believe that this same dynamic exists in the international marketplace allowing selective schools to enroll a mix of finanancial aid and full-pay internationals, just as Smith clearly does. Going “need-blind” for internationals appears to short-circuit this process. It drives up the number of applications. It may be as simple as sophisticated guidance offices at feeder schools like Daewon, assigning their high need LAC applicants to Williams and Amherst and their more affluent applicants to Swarthmore and Pomona. I don’t know.</p>
<p>well, think about it. how able are U.S. adcoms in correlating African, or Taiwanese zipcodes with wealthy neighborhoods? Do they even have a concept of wealthy neighborhoods in Hong Kong or Korea?</p>
<p>[U</a> of T to curtail aggressive investing - The Globe and Mail](<a href=“http://www.theglobeandmail.com/news/national/u-of-t-to-curtail-aggressive-investing/article1476669/]U”>http://www.theglobeandmail.com/news/national/u-of-t-to-curtail-aggressive-investing/article1476669/)</p>
<p>Finally, a University recognizes that the risks associated with investing in PE and Hedge Funds greatly outweighs the benefits and is bailing out. It’s about time that an American University took the lead and followed suit.</p>
<p>[Tuition</a> hike, job cuts at Brown University | Education | projo.com | The Providence Journal](<a href=“The Providence Journal: Local News, Politics & Sports in Providence, RI”>The Providence Journal: Local News, Politics & Sports in Providence, RI)</p>
<p>Brown has some of the same problems that Dartmouth has-running an operating deficit and little room left to borrow any more money. Puts more pressure on them to get expenses in line quickly.</p>
<p>Some schools that are need blind domestically are not need blind for internationals (such as UChicago). UChicago, though showing initial declines in its endowment, did not follow an overly aggressive investment policy and is in much better shape than some of its peers. Chicago is taking advantage of this by hiring 100 new faculty. Not all top privates are suffering the same fate.</p>
<p>[For</a> Buyout Kingpins, the TXU Utility Deal Gets Tricky - NYTimes.com](<a href=“http://www.nytimes.com/2010/02/28/business/energy-environment/28txu.html?pagewanted=4&ref=todayspaper]For”>http://www.nytimes.com/2010/02/28/business/energy-environment/28txu.html?pagewanted=4&ref=todayspaper)</p>
<p>Great article in the Times about the largest PE deal ever. Not hard to understand the pain the Endowments are facing after reading this article.</p>
<p>idad:</p>
<p>Yes, there are many colleges and universities that have survived the market collapse in stride. Everybody is cutting budgets, but some are in better shape than others. </p>
<p>I posted a fairly detailed summary (with links) of Swarthmore’s December board approaved three year cost-cutting plan and the 2010-11 budget approved last weekend:</p>
<p><a href=“http://talk.collegeconfidential.com/swarthmore/870195-board-approves-2010-11-budget.html[/url]”>http://talk.collegeconfidential.com/swarthmore/870195-board-approves-2010-11-budget.html</a></p>
<p>Using the new endowment level of June 2009, Swarthmore’s endowment spending for the current fiscal year is budgeted to be 4.15%. For next year, with the salary freeze lifted and a budgeted 11% increase in financial aid, Swarthmore plans to spend 4.2% of the June 2009 levels. Assuming the endowment maintains some of its recent gains 'til the end of the year, that percentage should decrease a bit. Spending rates for both years are below the school’s long-term target of 4.25% and well below where they thought they might be at the bottom of the market. In March 2009, the Board had approved spending rates as high as 5.6%, which would have exceeded the previous highest spending rate in the school’s history.</p>
<p>SM:</p>
<p>That Texas TXU deal is disgusting. Here you have a thriving US company, by all reports, that is purchased in a PE leveraged buyout deal. All the Wall Streeters pocket hundreds of millions and a company that was generating $2 billion in profits three years ago is now saddled with so much debt from the leveraged buyout that it will almost certainly collapse. That, in a nutshell, is what has brought the US economy to its knees. Everytime there is a successful, profitable company, it has to be destroyed in a deal that produces nothing of any tangible benefit for anybody but the deal makers. It makes you want to scream.</p>
<p>Makes you sick to see the money the PE firms are making on this deal(bottom of page 3) while bondholders and endowments/pensions are getting wiped out. 2 articles in WSJ today cite Shell and Calpers that are wising up and cutting and running from aggressive alternative investments in their pension funds. </p>
<p>What is also happening now is that significant dollars from capital call committments are going to bail out these over-leveraged investments. $800M from investors went to shore up Hilton, and $250M just went to help Fortress shore up Intrawest-the site of the Olympics.</p>
<p>Interesteddad - Swarthmore is a great financial model for other colleges and universities to follow unless, of course, those universities or colleges have any plans at all involving, 1) physical expansion, 2) enrollment expansion or, 3) program expansion. Swarthmore is essentially landlocked and hasn’t acquired an acre of new land since 1933; it is all of 300 students larger today than it was forty years ago; and, it’s biggest program initiative in years has been the recent acquisition of a full-time professor of Arabic. I’ll grant you they are very good at the calculus of compounding interest, but I’d also remind you, that the purpose of higher education is the transfer of knowledge from one generation to the next, not wealth.</p>
<p>[FT.com</a> / UK / Economy & Trade - Oxford investment performance hailed](<a href=“Oxford investment performance hailed”>Oxford investment performance hailed)</p>
<p>Interesting comments from Oxford University. My favorite-and this is coming from Oxford- is “there is no point in having a large allocation to private equity if you have no idea what you’re doing”. Refreshing brutal honesty and humility-don’t think you’ll see that on this side of the pond.</p>
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<p>That’s actually not true. Swarthmore buys land, houses, apartment buildings, and other real estate surrounding the campus everytime it comes on the market.</p>
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<p>Yeah, roughly from 1200 to 1500 students over the last 40 years. There is no push to grow much larger. Swarthmore views its small boutique size as essential to its style of interactive education and campus community. The small scale, admittedly a very expensive proposition, is one of the defining characteristics. It’s good to see that they haven’t gone for a big enrollment increase to balance the books, adding just 26 students.</p>
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<p>Actually, the entire Arabic program with two tenure track professors and three lecturers is new since 2001. It’s part of an Islamic Studies push that has seen three additional tenure track hires in addition to the Arabic faculty. Japanese is also new the same time frame with one tenure-track, one full-time visiting prof, and two lecturers.</p>
<p>The Film and Media Studies program is also new in that time frame, with two tenure-track hires, a third cinema specialist hire (in the German department), and a visiting film prof.</p>
<p>The breadth of Swarthmore’s academic offerings (for a school of 1500 students) is one of the reasons they spend so much money.</p>