Due to the economic downturn, the University’s endowment has lost over $120 million… and if you remember, Wesleyan’s endowment isn’t all that big, compared to our “peer institutions.”
A student in the know writes:
Wesleyan’s endowment is down 20% over the last 4 months, and there will be major repercussions for the University’s budget over the next few years—a $15.5 million deficit each year.
The trustees are considering a proposal from the administration that would deal with the problem by increasing class size by 30 for the next four years. There would also be major cuts across all the departments, a one-year salary freeze for staff and faculty, and a slightly larger than normal increase to the cost of tuition. No faculty positions or departments would be eliminated under this plan.
Students should be particularly aware of the ramifications of the first and last strategies being proposed. By increasing class size over the course of the next four years, if we reach our target admission levels, we’ll see around 120 more students on campus—making residential space even tighter (meaning triples for many more freshmen, and a lack of class-appropriate housing in general), leading to longer lines at dining venues, and possibly causing class sizes to swell. By tacking on an additional increase to tuition, the University would raise your bill next year by 5.9%, a bit more than the standard 5% annual increase.
The future is always hard to predict, but current projections, assuming a 5% year-over-year return on the endowment, put us back at our pre-downturn total in 2013. So, in a nutshell, current predictions show that it’ll take us five years to get back to where we were four months ago.
The Board of Trustees meets again in February—unless they decide to call a meeting sooner. It seems fairly certain that a quick reversal of fortunes isn’t on the horizon, and of course, there’s no guarantee that further erosion of the endowment won’t occur. By February, we’ll see if even more restrictive measures are needed to secure the financial stability of the University.