<p>Feb. 10 – Phillips Exeter Academy, the New
Hampshire preparatory school founded in 1781, will cut its budget
and freeze salaries after its endowment lost 22 percent last
year.
Phillips Exeter, which had a $1.04 billion endowment as of
June 2007, will reduce its budget by $6 million, or 8 percent,
Principal Tyler Tingley, said in a letter yesterday to alumni and
parents of current students.
These reductions will have implications on programs and
positions, Tingley said. Just how many people will be
affected, in what ways, and in which areas, are not yet known.
The cuts will help avoid a deficit of as much as $8 million
in the 2013-2014 fiscal year, Tingley said. Phillips Exeters
endowment provides about half of its operating budget and helps
the school guarantee a free education to any student whose family
earns less than $75,000 a year. The school plans to stick to that
policy and will raise tuition for 2009-2010 by 2 percent, its
lowest increase in 35 years, Tingley said.
Phillips Exeter said in December that it would postpone
renovations after the endowment dropped 18 percent from June 30
through Oct. 31. Tingleys letter yesterday said a plan to build
a health and wellness center has been put on hold
indefinitely.
Harvard Universitys endowment dropped 22 percent from July
through October and officials at the Cambridge, Massachusetts,
school are developing a budget based on a 30 percent loss. Yale
University, in New Haven, Connecticut, has said its endowment
fell about 25 percent. North American college endowments lost an
average of 22.5 percent from July to November.
For all of 2008, Phillips Exeters endowment fell less than
the Standard & Poors 500 Index, which had a loss of 37 percent,
including reinvested dividends.</p>
<pre><code> Student Costs Rise
With the increase next year, tuition will cost $38,720 for
</code></pre>
<p>boarding students and $29,920 for day students, said Julie Quinn,
a spokeswoman for the school.
Phillips Exeter has an enrollment of 1,055, with 840
boarding students, according to its Web site. Its alumni have
included U.S. President Franklin Pierce; Daniel Webster; Dan
Brown, author of The Da Vinci Code; and writer Gore Vidal.
The New York Times reported the endowment loss today</p>
<p>People are going to see changes, everyone is. Kids of ibankers will see changes, kids of doctors will see changes, kids in the projects will see changes. I think it is a refreshing coup, per say, for the public to see grand institutions such as Exeter and Harvard cutting down. </p>
<p>For most people of my generation, and for the vast majority of the people reading my post, cutting down and saving was not in the vocabulary (I am not saying we were all living lives like kings, or we were not budgeting at all… I am saying few of us will have seen such a serious cutbacks). </p>
<p>That being said I think the changes these schools will realize–students, faculty, etc–will not be of a large scale. The trustees will be more stiff before buying a new building, or new technology. The overall change in the material in such schools (in schools with smaller endowments the change will be proportionally greater) will be mundane in actuality, but the message that it carries is tremendous.</p>
<p>Wow Viola. For a while you were almost as bad as Senay, but your posts have become a lot more productive and far from being ■■■■■ posts. Thought I’d compliment you on that =) completely agree on what you said.</p>
<p>Hey thanks. This is the first forum I have participated in, so I’m a bit new, but I think I’m getting better. I’ve learned a lot from CC so I may as well give my 2cents…</p>
<p>This is really interesting though, what do you guys take of this? To me it means fewer and fewer people will be able to realize a greater education (and the american dream in that matter??? Can’t move too far up without a BA in SOMETHING). </p>
<p>-Most state schools cannot give too much FA
-For the state schools that can dish out some FA the price is high for OOS and the delta between that and a privatized college is slim
-Basically all of the schools that can actually give substantial Financial Aide to a family making sub 120k (and that figure will rise as the economy gets worse) accept such a small number of people that again the average will not be able to afford a college education</p>
<p>I am actually worried for the Juniors who did not pull out their money before the economy crashed. Seniors will be fine because they will have pulled it out of stocks in prep. for college and Freshman will be fine because if it follows trend the economy will be back.</p>
<p>Sorry for the confusion. I mean their parents savings. A lot of parents keep it in stocks until late Junior year. For this batch of juniors savings will be around 50%.</p>
<p>Parents invest their kids’ college funds in stocks??? What? The stock market is a pretty volatile place to keep college money, don’t you think???</p>
<p>Everyone in my area does. Stocks are extremely volatile, like you said, but they still provide a great environment to keep money in when the market is good. Like retirement funds people would pull it out of stocks soon before they go to college, late junior year for most people.</p>
<p>On a side note, Italian, how’s your portfolio doing? I was 500% (I started at a 100 so not really a big deal) on the day of the inauguration; now I am like 3%. Oh well =)</p>
<p>Sure, the stock market it volatile, but at the same time, reliable. Even now, with the Dow Jones flopping around, it is a fertile place; families like the Kennedy’s made their fortunes investing in a plunging stock market. </p>
<p>As far as the cuts go – I think it is safe to say that although there will be changes, I’m pretty sure, for now, schools like PEA and Harvard are still going to function as they always have. Sure, tuition is going to be a little higher and fewer new buildings and renovations, that sort of thing. I highly doubt it will come to the point where the changes and cuts become something students and parents should really start worrying about.</p>
<p>That’s what my parents are saying. As a Freshman they are putting more and more into the market. Yeah they put in X one night and next day it’s X^-10 but all trends show that it will go up in a few years. Point being the people who have college in a few years who had their money in the market until the meltdown will be devastated.</p>
<p>Cuts will be proportionally greater the smaller the endowment is. Many great schools have small endowments and either they compromise on a lot of things, close, or increase tuition a LOT.</p>
<p>Parents often put college money in accounts that contain stocks, bonds, mutual funds in varying degrees. Some of the these are in 529 accounts, which invest more conservatively as college draws near.</p>