Periwinkle

Google "Commonfund" and "Wachovia."

An article from Philanthropy.com which outlines some of the consequences--last week--for nonprofits, including schools: Foundations and Charities Harmed by Economic*Turmoil - Philanthropy.com.

Wall Street Journal: Another Fund Heavily Used by Schools Is Frozen - WSJ.com

"The Commonfund Intermediate Term Fund held $1 billion in assets for the schools. Commonfund, a Wilton, Conn., investment adviser for colleges and schools, told clients they could withdraw only 30% of their money now, and said it will make the rest available "as quickly as possible," depending on market conditions. The fund would normally give investors any part of their money the day after a withdrawal request."

At present, the depositors can look forward to getting all their money back, in installments, by 2011.

Periwinkle

Some schools will be fine. I'd guess that the schools with the largest endowments will do well, because they'll have diversified their holdings. Some schools will have problems, ironically enough, some of them will have problems because they chose "safe" investments. Some schools will have built long term relationships with wealthy families, who will be willing to help them through hard times.

(my predictions) Endowment funds devoted to financial aid will guarantee that financial aid is still offered. The competition for FA will be even more intense. Most of the methods schools choose to trim their budgets will not affect the quality of education they offer.

creative1

This is currently one of the featured discussions on CC:
TIME: "Colleges Getting Hit by the Credit Crunch"

hickton45

The Rector at SPS made an announcement stating that the trustees had reported a significant loss of funds in the endowment. He also said, however, that we shouldn't worry.

sugerkim

There were several articles in the Phillipian last week about how Andover is handling the economic crisis. The Head of School also sent out an email to the Andover community to reassure us. They basically said the endowment is well diversified, but everything is down. Financial aid will continue to be need blind, but there will be adjustments in other areas.

hotchkissjin

wow that thought had never crossed my mind. that's interesting....

D'yer Maker

I'm assuming that full pay applicants within the U.S. will plummet this year. There will be significantly fewer people who, by January, will be able to commit to four years of boarding school tuition without aid. And, frankly, those who want aid and may need aid are going to be burdened by the fact that their tax returns may not support the level of aid they need (then again, isn't that always the case?).

I wonder how admissions offices are going to respond to this. Will they reduce class sizes? Will admissions be less competitive this year for full pay applicants? For that matter, will admissions be less competitive this year for financial aid applicants? (On the theory that a 2/3 paying student beats an empty bed and desk.) Will they alter the composition of the student body in some other way to adjust? Or are they simply going to make tweaks that will barely be noticed?

The bottom line questions of practical relevance is should applicants this year adjust the list of schools that are within their grasp when deciding where to apply? Should the traditionally more competitive schools be looked at more closely? Should schools with smaller endowments be avoided or looked at warily?

And where does one turn to get authoritative and informed answers? I ask this last question because I think many educational consultants are masters of the stasis that existed before this year, but I wonder how (and whether) they are keeping up with the volatile flood of information they need to be gathering and processing to effectively advise applicants this year.

creative1

With parents' weekend approaching, it will be interesting to see if some of these questions get addressed.

It's amazing to see how much further things have deteriorated in the financial markets since I started this thread 2 weeks ago.

If I had a child applying this admission season, and was full pay, I would definitely reach for schools. I think your chances would be better than ever. I think the full pay applicant will have a much easier time, and if you're looking for FA, apply to a lot of schools and good luck!

I agree, D'yer Maker. The number of apps will have to be down. Many folks have seen their net worth cut in half. Very sobering...

newyorker22

Dyer maker,

yes, I agree that educational consultants know what went on last year and in year's past, but they (we), also know that this year is a complete blood bath. Many people in the know are saying that some schools will go out of business. Obviously not Andover or St Paul's but I'm sure you can all think of a few. Those that were always a big short on students, had little endowment..... they are not going to be able to find enough people able to pay $40k.

Consultants are also talking about the college market. More people are turning to state colleges and might incorrectly assume they will get in. MOre are asking for aid and might incorrectly think they will get it. Lenders are cutting back. There is some concern that families are not preparing for this year's college situation in the way that they should, and consultants are asking colleges to speak out on this topic.

As for the boarding schools, it's going to be very tough for them this year. I'm still a bit shell-shocked by all that has happened in the markets, and particularly my region, the NYC area. Of my "families" that I work with, they are in the process of reconsidering whether boarding school is money well spent for them in light of the plummeting market and uncertain job situation.

But one of them told me he is calling for a bottom in the stock market decline next week, so let's all hope it is onward and upward from here!

Periwinkle

The following article covers colleges, but the essential concerns are the same. Financial meltdown hits ivory towers - Yahoo! News

Burb Parent

This is what the Blair Headmaster wrote about economic hard times last summer, and before this rollercoaster stock market http://www1.blair.edu/Downloads/bull...inSummer08.pdf. See page 3. Does anyone have the NAIS (National Association of Independent Schools) article he references? I am interested in reading it, but I could not find it on their website.

Periwinkle

Burb Parent, I don't think this is the article, but it's a recent power point presentation by Patrick Bassett: NAIS - About NAIS - Financial Survivability.

Periwinkle

Found it! NAIS - About NAIS - Bassett Blog: The NAIS Affordability Index

Burb Parent

Thank you! Both articles were interesting and relevant to this discussion.

Periwinkle

Bump! As the board's developing multiple threads on the topic.