<p>^ I am so confused.
"The top ten LACs are all comparable... They all offer basically the same of quality of education"</p>
<p>then you say
"except Bowdoin, Wellesley, Pomona, Carleton"</p>
<p>Those are like half of the top ten LACs. </p>
<p>"none of which should be accredited, let alone ranked"????</p>
<p>I am not a Middlebury hater at all and in fact, after Princeton, Dartmouth, Williams, Colgate would maybe consider it the most desirable school to attend based on what I was looking for. I just don't understand why a school with a historical SAT average in close proximity to Colgate, Colby, Hamilton, Bates would be ranked so much higher on USNWR than them and even higher than schools I always have considered stronger like Pomona, Bowdoin, Wesleyan.</p>
<p>U.S</a>. News Rankings Through the Years</p>
<p>Actually, the top 10 LACs are NOT comparable. There are significant differences in per student endowment once you get below the top 5 or do.</p>
<p>People are going to really see the impact of a big per student endowment as colleges begin deep cuts in programs over the next two years.</p>
<p>For a long time Middlebury reportedly was playing games with their SAT reporting. This "SAT optional" stuff creates a non-level playing field, vs. most of their competitors. To the extent that their current rating was built in part on their past (at least) subterfuge, that has a certain odor to it, to me.</p>
<p>interesteddad, I'd stop tooting that horn, if I were you. After all, it's no secret that the colleges with the highest per capita endowment ratios are also the most dependent on the income from those portfolios. Isn't Swat on the hook for something like 50% of its operating income? Here's what Yale's prez has to say about the downside to being <em>too</em> endowment dependent:</p>
<p>"While a $17 billion endowment is huge, the university is also very dependent on it, since the endowment provides 44 percent of Yales $2.7 billion budget. Mr. Levin warned that the 25 percent decline was likely to lead to a $100 million shortfall for the 2009 school year that would grow to more than $300 million by the 2013 school season."
<a href="http://www.nytimes.com/2008/12/17/business/17yale.html%5B/url%5D">http://www.nytimes.com/2008/12/17/business/17yale.html</a></p>
<p>In other words, things are likely to get worse -- much worse -- before they get better.</p>
<p>alexkaye I stated earlier that I am wrestling in college next year for Northwestern, I am not going to Kenyon.</p>
<p>"People are going to really see the impact of a big per student endowment as colleges begin deep cuts in programs over the next two years."</p>
<p>idad, did you, in fact, mean that those with the biggest endowments would be hurt the most, because their main source of income will dry up? Makes sense to me.</p>
<p>^^^my point, precisely.</p>
<p>Swat's mascot is not the Phoenix. It's the Garnett</p>
<p>Country Day,</p>
<p>I've noticed that you have mentioned several times that you will be attending Northwestern next year. Yet you seemed very focused on LAC's. Are you happy with your decision to wrestle for Northwestern? I am guessing that if you are a good enough wrestler to be recruited by Northwestern, many of the schools on this LAC list would also find you a desirable candidate.</p>
<p>
[quote]
For a long time Middlebury reportedly was playing games with their SAT reporting. This "SAT optional" stuff creates a non-level playing field, vs. most of their competitors. To the extent that their current rating was built in part on their past (at least) subterfuge, that has a certain odor to it, to me.
[/quote]
</p>
<p>If you look at the methodology used by U.S. News, you'll see that even a 100-point difference in reported SAT scores has a negligible affect on rankings.</p>
<p>
[quote]
If you look at the methodology used by U.S. News, you'll see that even a 100-point difference in reported SAT scores has a negligible affect on rankings.
[/quote]
</p>
<p>This is exactly one of the things I think is wrong about the criteria and weightings that USNWR uses. Personally, I don't think USNWR should disclose what their criteria or allocations are and then there would be less attempted gaming of the system. I think yield should be a measurement included in the rankings, but not if the colleges know this and are doing all they can to manipulate it rather than viewing it as no more important than 20 years ago when nothing other than peer assessment comprised the rankings.</p>
<p>Then there is the notion that the whole idea of building a one-size-fits-none ranking is doing a disservice to almost all HS graduates, misleading them into thinking that the higher-ranked schools are best for them, when it is almost always not the case. The data USNWR gathers are great, but forming a single ranking from them is worse than pointless. So there. :(</p>
<p>Vossron, I couldn't agree more. Perhaps USNWR could provide the same valued information in an unranked format, listing the schools in groupings based on selectivity. They do not rank the 3rd and 4th tiered schools. These schools are simply listed alphabetically.</p>
<p>Well, I think the single criterion of selectivity (the result of popularity) is just as wrong as USNWR's jumble. Alphabetical or regional is neutral.</p>
<p>
[quote]
idad, did you, in fact, mean that those with the biggest endowments would be hurt the most, because their main source of income will dry up?
[/quote]
</p>
<p>No. Even if endowment returns were the only revenue stream being reduced by the bad economy, that would not be the case. Let's use a high endowment LAC and a low endowment LAC as examples: Swarthmore and Wesleyan since I have their 2008 financial reports handy.</p>
<p>Wesleyan has per student spending of $54,997 of which $10,581 comes from endowment spending. They are already topped out in terms of percentage endowment spending (4.8%), so a 30% decline in endowment means a 30% decline in that endowment spending. With no other reductions in tuition, giving, etc, Wesleyan will need to bring per student spending down to $51,823.</p>
<p>Swarthmore has per student spending of $81,350 of which $36,361
comes from endowment spending. Wesleyan and Swarthmore have virtually identical net tuition revenue ($32k per student). Swarthmore was at the extreme low end of their target endowment spending in 2008, just 3.7%. They can go to the top of their spending range (4.7%) to partially offset a 30% decline in endowment. They will need to reduce endowment spending by approximately 12% (roughly $4,000 per student) with an endowment decline of 30%. With no other reductions in tuition, giving, etc, Swarthmore will need to bring per student spending down to $77,225.</p>
<p>In reality, both schools will have to cut more deeply than that as net tuition revenue is almost certain to fall, as will charitable giving. </p>
<p>Swarthmore had completed all of their planned construction projects including two new dorms, a new science center, a complete top to bottom renovation of the main administration building, new lighted athletic field and so forth. They had nothing on the drawing boards, a surplus of housing capacity, and no deferred maintenance. The cuts won't be easy, but the educational program should remain largely untouched.</p>
<p>idad, thanks, but I have to naively ask: If Swarthmore has per student spending of $81,350 of which $36,361 comes from endowment spending, and net tuition revenue of $32,000 per student, where does the other $12,989 come from? Is it miscellaneous*, like donations and grants from various outside sources?</p>
<p>With the worst case of endowment and miscellaneous* income going to zero (or worse, if there is innocent exposure to Madoff gains that must be repaid), re the Fed's rate cut to zero (apples and oranges, but with fallout):</p>
<p>Swarthmore: $81,350 - $32,000 = $49,350 shortfall
Wesleyan: $54,997 - $32,000 = $22,977 shortfall</p>
<p>Swarthmore can better (longer) survive, with its 3.44x larger endowment.</p>
<p>
[quote]
where does the other $12,989 come from? Is it miscellaneous*, like donations and grants from various outside sources?
[/quote]
</p>
<p>$8250 per student in gifts and grants - primarily the annual alumni fund, but also things like the Howard Hughes Medical Institute and Carnegie Foundation grants. HHMI is a half mil a year, primarily to fund student research summer internships and a tutoring/study group program in the hard sciences (actually a pretty cool peer learning program). There are always some signficant grants from the Carnegie and Rockefeller Foundations, for library projects, for hiring Arabic professors.</p>
<p>The rest is miscellaneous revenues: interest on operating cash, renting the place out for tennis and soccer camps in the summer, renting faculty housing, the sale of bookstore merchandise -- a little of this, a little of that.</p>
<p>Not so fast, Interesteddad. You've shifted the argument from income to expenditures (and, back again) when it suits your argument. There's a difference. Looking at the same financial statement (Wesleyan's 2006 IRS filing for non-profits) Wesleyan's total REVENUES show a total of $206,000,000. Rounding the student body (including FTE grad students) to a generous 3,000, that makes total per capita revenue closer to $69,000 per student, not $55,000. The difference between your per capita figure and the figure drawn from Wesleyan's own 2006 tax return is probably the amount that Wesleyan collects from its NSF/NIH funded laboratories. </p>
<p>In light of that fact, a reduction even of 30% in Wesleyan's endowment income would only amount to a reduction of 4 per cent in total per capita revenues.</p>
<p>A similar reduction in Swarthmore's per capita endowment revenue would result in a 13% reduction (assuming total per capita revenues of roughly $81,000.)</p>
<p>johnwesley:</p>
<p>I really don't think you want to use those numbers. The IRS reporting lump endowment returns in with operating revenues. In FY2006-07, that meant an extra $75 million in "revenue", but a $78 million loss in FY2007-08 as the endowment declined.</p>
<p>As you can see from page 11 of the actual year end financial report, endowment returns are typically treated separately as non-operating activity with only the portion actually spent for operations hitting the operating budget:</p>
<p>If you want to do it your way, Swarthmore had $312 million in revenue in FY2006-07 versus expenses of $115 million for a bottom line in plus column of $197 million.</p>
<p>BTW, if you read the notes to Wesleyan's June 2008 Financial Report, they have some particular vulnerabilities.</p>
<p>**Spending too much from the endowment: **Wesleyan's policy is to spend between 4.5% and 5.5% of the 12 quarter rolling average. For the last three years, they have been well above that target (7.4%, 6.4%, 6.1%). While headed towards their target, Wesleyan has no room to increase endowment draw. </p>
<p>Commonfund: Wes had $29 million in the Wachovia Commonfund when it ceased operations in October. It has been able withdraw some of that money, but still had $11 million in cash that could not be accessed in the Commonfund at the end of October.</p>
<p>Variable Rate Demand Bonds: These bonds are a nightmare for colleges right now. To get lower interest rates, these things are re-priced and traded daily. If there is no secondary market for the bonds on a given day (as happenend when the credit markets froze), the college is obligated to buy back the ENTIRE bond issue within a couple of hours. This means that the college must back up the bonds with huge liquid cash reserves or a line of credit to fund t he purchase of these bonds. These bonds became so poison in October, that daily interest rates shot up as high as 12%. In stroke of horrible timing, Wes had just converted two of its bond issues to these VRDB bonds in April. They also have some interest rate swaps to conver variable rate fluctuations on other bond issues. Harvard just borrowed $300 million to buy out a similar interest rate swap, so I'm not sure that the interest rate swaps on variable rate bonds are that great a deal right now.</p>
<p>Wesleyan will weather this storm, but there is a reason they have been particularly aggressive in their cost cutting in the early stages of this process. This is going to leave a mark.</p>