<p>“Williams was having difficulty enrolling international students BEFORE they started outspending their peers by 2 to 1 on international aid to increase their numbers.”</p>
<p>One final response to the continuing prevarications: even according to your (self-produced?) graph, Williams was in the top 50% of ten tracked institutions in terms of international enrollment as far back as 1994 to the present – a full 8 years before President Schapiro announced the initiative for need-blind international financial aid. </p>
<p>In addition, Williams has recently articulated a goal of working towards an international component of 10% of the student body – and is ahead of its peers with its last two first-year class enrollments of 9% (vs 8%) international. Just as Harvard, Yale and Princeton upped the ante in this regard, Williams is cognizant that increased international enrollment will offer all of its students – both domestic and non – a world-class educational experience.</p>
<p>It is also well-known that Williams provides generous financial aid to not only its international students, but its domestic students as well – thanks to the numerous gifts of generous alums, parents, and friends of the college. </p>
<p>(This is my final comment unless, of course, continued mendacity requires another response to provide the truth).</p>
<p>I concede Williams is a great school. Someone cry “uncle” on this one. Still my point remains… your generous alumni, parents and friends of the college are taking a financial hit just like the rest of the country, thank you Madoff and his ilk, not to mention the real downturn of the rest of it. So before we start freezing salaries, forgo hiring, increasing class sizes, stop any kind of improvement of resources, we should also look at the budget numbers and see if a “world class education” need also include huge aid to international students who, as i said before, have mostly already been predetermined to apply and frankly, since it is a class thing, lots can afford to be full pay.</p>
<p>Please - we all know that InterestedDad is a Swarthmore partisan, but he is also a great source of information, for which I’m grateful. No need to call him a liar on something that seems to be a subjective point. Nobody denies that Williams is going after the international crowd, and has been doing so for quite some time. </p>
<p>Modadunn raises a good point. Does a larger population of international students provide value that equals the price colleges pay for aid on this scale? Obviously a rhetorical question - we can’t quantify the value. But obviously the college administrators are going to be asking the question when the budget axe falls - again and again.</p>
<p>Again and again is right. I think most of the colleges have FY 2009 - 10 starting in July 2009 under control with the low hanging fruit of budget cuts (hiring freeze, salary freeze, buiding freeze, add sp,e extra students, reduce budgets by x percent). There’s some pain, there are some cuts, but there aren’t any REALLY hard decisions. </p>
<p>The problem is that endowment spending levels to make that work for one year are too high to be sustainable. Unless there’s an uptick in endowments over the next few months, colleges are going to have to start implementing the phase two cuts for the fiscal year starting in July 2010. Those are really going to hurt. It’s easy to say, “oh another 5% cut”, but when you already have a hiring freeze, a construction freeze, and a salary freeze, the only thing left is to start cutting programs. Big programs. Cut need-blind for internationals or cut football? Cut Arabic or Linguistics. The Writing Center or diversity visit days? There are no good answers on some of these choices.</p>
<p>There is another thread about the value of private K-12 education vs public. And I think in the last few years people have forgotten, at least around here, the massive cuts in the late 90’s to public school’s budgets. And yes, they did cut the writing center and the tutoring help for middling kids. Basically they serviced three subsets: The gifted and talented (an always dubious term in my eyes), those with special education needs (as mandated by the US Gov’t) and English as a second language. And while there were no good choices as Interestedad points out, it sucks when so many of them seem to affect your child. And while I don’t know I have confidence in all these schools (Top 10 or so) saying, “we’re in a better position than most of our peers in this regard,” it would be very helpful to know where that other 5% sits with most schools. And if it was going to change from meeting full need to doing the best they can, will certainly mean something different to someone else to what it means to me. I might be more interested in science initiatives or the beforementioned writing center. </p>
<p>This is a wickedly painful year for all sides of this process. It is still the largest graduating class in the country, and regardless of applicant numbers falling at some schools, it’s still an incredibly competitive process. And now, not only do we have all the stresses of just waiting it out to see if your kid even got in, you now have to be slightly freaking because who knows if the school will even resemble itself two years from now.</p>
<p>I want to be fully informed about a college’s financial situation before I will send my son there, it would be heart-breaking to have to pull him out because of the school’s situation or get huge % increases every year.</p>
<p>I don’t believe the elite private colleges are being realistic about the financial aid request increases they will see for second term of 2010 (spring) or for 2010-2011. Parents that are being layed off from their $100K/yr+ jobs now will have 6 to 12 months severance pay, but then face the porblem on not finding a equal paying job, but will have to settle for something a lot less.</p>
<p>So if they had kids, where they are paying to full freight at these top schools, they could l be asking for at least $25K discount for the next academic year, and will these schools be prepared to help?</p>
<p>A tsunami wave will be hitting these schools, with distressed students asking for huge increases in fin aid.</p>
<p>Well, that’s one of the big question marks. I don’t think anyone really knows how the financial aid budgets are going to play out at the top-ranked schools. The schools are all waiting to see how “yield” plays out for deposits in April/May. Schools like Amherst were already giving finanical aid discounts up to $200,000 a year annual income. The no-loan policy is a middle-class discount.</p>
<p>I guess I am slightly confused. How can a school be completely need blind during these economic times, even if they ARE need blind? I would imagine that at some point in the process they would reach that of negative return. In other words, with all things being equal about a student, the nod goes to the income stream. And it’s not like they don’t have that info since you cannot even submit an application without checking the box whether or not your applying for aid. </p>
<p>I understand that diversity is good in all things (socioeconomic, URM etc) and I think there is a good argument to absolutely take the strongest students in need of aid, but I cannot believe that if they look at “everything” a student brings to the table, that their wallet wouldn’t be one of them. I mean, doesn’t holistic mean the whole of everything?</p>
<p>The $500 million in cash call commitments disturbs me enormously. A 2/25/09 article in the Boston Business Journal said that as of 6/30/08, Amherst’s total investments (including those outside the endowment) totaled: $819.3 million in private equity; $623.9 million in hedge funds; $541.4 million in publicly traded equities; and $188.3 million in fixed income investments and cash. Since then the public equities portion must be down about 40%, to around $325 million. That amount plus the fixed income and cash totals about $500 million, the amount of the outstanding cash calls. Can someone please explain to me why this is not extremely serious? Is there a chance the cash calls could grow while the investments underlying them remain totally illiquid?</p>
<p>The cash call commitment issue is a very serious problem - for Amherst, for Harvard, for Princeton, for Yale. Trust me, the last thing anyone at Amherst ever dreamed of doing this winter was borrowing $100 million in taxable bonds at interest rates of 5% or higher. That’s an additional $5 million a year in budget cuts Amherst is going to have to find, as the cost of bailing out the cash flow problems.</p>
<p>Saving grace? The cash call commitments are spread over several years and Amherst’s Aaa bond rating means they can continue to borrow as needed. </p>
<p>It’s a serious miscalculation by the board and/or the investment managers. Heads should roll and probably will. Amherst didn’t need to be rolling the dice. The size of the endowment meant that it was perfectly fine to be conservative with the endowment.</p>
<p>The cash call commitments for the private partnerships won’t grow unless Amherst’s board is asleep at he switch and doesn’t fire the investment managers who make these commitments. There are some other types of cash call situations that could grow – Harvard is involved in a lot of highy leveraged derivatives and swaps that are generating collateral calls. That’s different.</p>
<p>The investments in the private equite, natural resource, and many hedge funds are not only illiquid, but many of them are bordering on worthless. Timber land? Oil tankers full of oil waiting for the price of gas to go back up to $5 bucks a gallon. Leveraged buyouts at the top of the stock market two years ago? These investments are basically worth bupkis. That’s why there are no payouts to cover the next round of cash calls.</p>
<p>So for those of you who are sounding the alarm bells about Amherst’s financial situation: if you are trying to choose between Amherst and another top LAC that maybe is fiscally in better shape at this point (let’s say for sake of debate, Williams), is this a big enough issue to sway you to Williams? I guess I’m trying to weigh whether all of this talk of capital calls and bond ratings is really going to affect a student’s four-year experience at Amherst. Thanks.</p>
<p>Well, it would be hard to say exactly, but even if Williams or some other LAC is in better shape than Amherst, it’s a pretty good bet that ALL will be seeing cutbacks. That’s something to consider. It’s not going to be like a Dickensian Amherst compared to a Xanadu Williams.</p>
<p>That really is the million dollar question. No pun intended. How does a college’s current financial situation when combined with its current physical plant and shelved projects, stalled hirings, etc affect a kids educational opportunities. </p>
<p>It’s interesting because my son applied to schools that end up being all over the map in regards to these things. How deeply will the school’s he ultimately accepted to have to cut into the muscle and bone (as Interesteddad has pointed out). S didn’t apply to Williams, but it will be part of the discussion. Basically, I don’t want a bait and switch (extreme example but making the point) with any school my son considers because 50K+ is a lot of money. Plain and simple. For some it might all be about their financial aid packages (and as we’ve said, those budgets are increasing, not decreasing) but you can’t get blood from a stone. </p>
<p>Frankly, I think the whole country ought to get a lot more savvy with a balance sheet to some degree. I think, if nothing else, since September we’ve learned we really should pay more attention.</p>
<p>The top endowment LACs (Pomona, Amherst, Swarthmore, Williams) have all been spending roughly $80,000 per student, not counting financial aid.</p>
<p>They are all looking at significant budget cuts over the next three years, probably 10% to 15% down from this year’s budgets, phased in over a couple of years. </p>
<p>Amherst will have to make more cuts. Borrowing $100 million for operating capital is going to cost them roughly $5 million a year in debt service. That’s $5 million a year in additional cuts they have to make elsewhere in the budget. That’s $2750 per student per year.</p>
<p>It’s too early to know where the priorities will end up at each school. I believe the the schools are serious about budget cutting, but I’ve not yet seen anybody put any particularly hard cuts on the table for discussion. For example, I haven’t seen Williams actually discuss cutting Winter Study. I haven’t seen Amherst actually discuss cutting football. I haven’t seen Swarthmore actually discuss cutting the 130 outside examiners they bring to campus every spring for oral exams of honors students. Everybody is being pretty cagey at this point.</p>
<p>One way to consider things is to look at what buildings got built and what programs got up and running before the onset of what will be a multi-year frozen tundra. Williams got everything built (acdemic buildings, science center, theater, student center) except a library. Swarthmore got everything built (theater, academic buildings, science center, dorms) and didn’t have a library on the drawing boards until the next campaign. Amherst got the dorms built and remodeled, but did not get the science center built. </p>
<p>You can also look at new academic programs. Arabic is an interesting comparison since that’s the red hot new program.</p>
<p>If I felt that one school were heads and shoulders a better fit than the others, I haven’t seen anything that would offset that choice. If I were dead tied among several schools, I would consider the budgets pretty closely. It’s just a little bit too early and they may all hold off on the first round of hard choices until after the May deadline.</p>
<p>Williams isn’t merely postponing a library; they are stuck with an almost untenable architectural situation; the library they all thought was too “ugly” to continue standing has been flanked by two additional buildings that were supposed to redefine the center of its campus. Together, they form a wall of brick and glass where just a generation before had stood a stately frat building. Contrary to most “prestige” projects, the architects don’t even acknowledge it on their website.</p>
<p>I agree completely. And it is the last statement that concerns me most. Middlebury has been faulted for their expansive capital improvements, however, one has to wonder now if it wasn’t one of those crazy as a fox moves.</p>
<p>^^Middlebury is doing what it has to do to keep up academically – it’s expanding its student base. Since small town Vermont villages don’t come with a lot of housing stock, it had no choice but to build a swath of new dorms. And, there’s no question Middlebury’s new library is head-and-shoulders above what they had before.</p>