School forced to tighten up
In an open letter to students, parents, staff and alumni, college President Morton Schapiro said putting off $100 million worth of new construction projects, cutting $3 million in maintenance efforts and a slow-down in filling vacancies will take effect immediately. For the longer term, he wrote, officials are considering a "modest" increase in the number of students accepted in coming years.
The value of the Williams College endowment, which had risen as high as $1.8 billion last summer, has fallen as a result of the sudden financial downturn.
In his letter, Schapiro noted that during the last fiscal year ending in June, the investment return of the college endowment was minus 1 percent, "and since June 30 all world markets have dropped precipitously further."
College spokesman James Kolesar said that since June 30, those markets have declined by 20 to 30 percent.
Schapiro's letter said officials expect a decrease in both endowment fund growth and income from gifts and tuition.
"While we haven't seen substantial effect on giving to the college, it's reasonable to expect that global economic uncertainty will dampen it for some time," Schapiro wrote. "Finally, as unemployment rises, some of our families will find it harder to pay student charges."
Included in the list of actions being taken is the year-long postponement of the renovation of Weston Field and the next phase of the Stetson-Sawyer project, which together are estimated to cost about $100 million, Kolesar said.
"This will preserve capital, put off additional debt interest payments and provide time to better understand the depth and breadth of the economic downturn," Schapiro wrote.
Spending on other maintenance projects, which he referred to as "facilities renewal," an annual cost of about $12 million, will be reduced by $3 million.
"We have very little deferred maintenance, so pushing some of this work off to the future makes sense when times are tight," Schapiro noted.
While the college intends to retain current faculty and staff by ruling out any layoffs, any vacancies will be reviewed on a case-by-case basis. For those deemed essential, a search will begin to fill the opening. Any others will remain unfilled.
"How long these positions remain open will depend on the time it takes for college's revenue to stabilize," Schapiro wrote.
Kolesar said that each year there are about seven faculty openings and 10 staff vacancies. Williams employs 1,068 people, with 323 faculty members.
Schapiro said ongoing discussions will identify other possible means to cut spending or increase revenue. "One possible example would be increasing the size of each entering class by a modest amount," Schapiro noted.
On the other hand, efforts will increase to help students whose financial aid situation has become more severe.
While Williams College has one of the highest tuition rates in the nation, 95 percent of American families already qualify for financial aid under recently revamped guidelines, which eliminated student loans in favor of tuition grants.
The cost of tuition, room, board and fees at Williams increased $2,390, or 5.3 percent, for the 2008-09 school year to nearly $50,000 a year.
At the start of the school year, officials expected roughly 50 percent of the Class of 2012 would receive more than $9 million in college aid, according to an admissions office memo.
Financial aid packages average $37,000, with families picking up an average of $17,000 of the cost.
Last fall, the total enrollment was 2,112 students.
"Our first priority will be to protect current and future Williams families," Schapiro said. "We'll maintain our financial aid programs and extend help to those whose changed circumstances reduce their ability to pay."