<p>Relatively speaking, Swarthmore is in excellent shape dealing with the recession. The improvment in year end endowment numbers of almost $100 million over forecast improved the picture even more.</p>
<p>Swarthmore is now budgeted to spend only 4.1% of endowment this year (starting July 2009). That is right in the middle of their long-term target and an astonishing figure – the lowest I’ve seen. </p>
<p>Swarthmore has cut spending with some short-term measures: salary freeze, spending down some reserve funds that were filled to the brim during the boom years, and cutting maintenance construction projects (they didn’t have much deferred maintenance but they are painting offices a little less frequently, buying new computers for everyone every four years instead of every three, deferring some handicap access projects, and so forth). They will need to replace those temporary cuts with cuts and/or allowing increased revenues to offset. That’s what the Ad Hoc Commitee is working on.</p>
<p>They have AAa bond ratings. Manageable debt of $180 million on a $1.1 billion endowment. Not a dime of variable rate bond debt (which is going to be brutal when inflation hits). It’s all fixed rate bonds. Manageable cash call commitments to private equity of $220 million. Enough cash and bonds to cover liquidity needs (endowment draw and cash calls) for three or four years. And, all of their building projects are finished. New dorms, new science center. Major renovations academic and admin buidlings. New athletic facilities. All done. Next up is expanding the library, but that’s a “next campaign” project.</p>
<p>From what I have read of the current endowment circumstances of some other colleges on this web site it seems that Swarthmore is doing very well. </p>
<p>Do you think this means Swarthmore may be able to be a little bit more generous with their financial aid than some of the other leading LAC in the comeing years?</p>
<p>Swarthmore has one of the strongest financial aid programs among LACs to begin with. I’d like to say that they will have an advantage over other top LACs in that, but I don’t think that’s fair. Every school is doing their absolute best to preserve financial aid dollars. There have been some cuts, like Amherst increasing the expected summer earnings and so forth. To be honest, I expect those kinds of changes to be relatively modest among all the top-tier schools and most of the changes will be subtle and hard to quantify. I would say that Swarthmore has an edge over the next tier down, but not over the very tip-top tier of big endowment LACs. Willaims, Amherst, and Pomona have strong financial aid programs, too. One particular student will get a better aid package at one school, another paticular student at a different school.</p>