The economy: screwing high school seniors since '08

The Times reported yesterday that in the face of shrinking endowments, universities are increasingly choosing wealthier applicants that can foot the full ticket of an education over students that would need financial aid if admitted.

Coupled with the fact that Ivies' (and other selective college's) acceptance rates are dropping, high school juniors across the nation have collectively just sighed a massive "fuck my life."

(image © Hasbro)

WAS

IN PRINT: Princeton makes budget cuts while increasing workers' salaries

Princeton University has an $82 million budget-cutting plan set for the new fiscal year, Princeton administrators told members of the community during a town hall meeting on Wednesday afternoon.

Princeton currently has an operating budget of $1.3 billion, 48 percent of which comes from investment income while 29 percent came from student fees, 16 percent from sponsored research and 9 percent from gifts, Vice President for Finance Caroline Ainslie said.

“Princeton is especially dependent on investment returns compared to other public institutions,” Ms. Ainslie said. Princeton averages a 15 percent return on the endowment. Last year, however, returns were only 5.6 percent and they are expected to fall 20 percent for the 2009 fiscal year, Ms. Ainslie added.

“This gives you a sense of why we’re not in the same good old days and why the times are not normal,” Ms. Ainslie said. The new budget will cut the amount that comes from endowment returns by 8 percent or $74 million, Provost Chris Eisgruber said. Princeton also borrowed $1 billion for operations in order to prevent increased endowment spending, Ms. Ainslie said.

Mr. Eisgruber said that these measures are only the beginning.

Read entire article in the Princeton Packet here.

SJP

Provost Eisgruber: We're F*cked

At the monthly CPUC (Council of the Princeton University Community) meeting last week, Provost Eisgruber presented on the university's financial health.

It was, not surprisingly, very depressing.

We've all heard about plummeting university endowments across the country in recent months. PRINCO (which manages Princeton's endowment) predicts our $16 billion endowment will fall 25% this fiscal year. That amounts to roughly $4 billion of Princeton's endowment.

But even more shocking was the Powerpoint slide that showed that, under realistic conditions, Princeton's endowment will not return to $16 billion until 2020, at the earliest (see chart above). By then, we will have children and a mortgage.

Eisgruber said it was time for us to get used to a new "normal" (in other words, being somewhat poorer). The university is facing an $82 million shortfall, and is in the midst of budget cuts. Eisgruber also said he is almost certain that Princeton will make a second round of budget cuts next year.

One piece of good news, however: Princeton will increase the financial aid budget by 13% next year.

Also at the meeting, President Tilghman promoted a new web page where anyone can suggest ideas for administrative budget cuts. So email away! Save your university!

(image source: dailyprincetonian.com)