Thought that I ran out of comments on Will Slack’s ’11 excellent summary of Morty’s talk on the College’s financial situation? Oh, ye readers of little faith.

Background: Part 1, Part II and Part III.

Will writes:

Mainly, there’s a lot of fat in the budget. Our number one priority is the need blind admissions, and the average student on financial aid pays 20%. Williams hasn’t had hard choices, Morty discussed a faculty reception and some excesses to cut.

Details, please!

Yes, because a few extra students will be great on the margin for Williams. It was a dumb thing to say in his letter; it caused a ruckus, when all that’s going to happen is that a few singles will revert to the doubles they once were, and there will be fewer classes with 7 people in them. It’s easy money – for almost no cost, the college can get $600,000 in extra revenue from 20 more students, half on aid. That’s $600,000 more to spend on travel and other programs. In retrospect, the college might have done better to “misjudge” the yield, and keep the extra students without articulating a policy change.

Say what you will about Morty but, in his speeches at Williams, he is almost too honest. What is the best way to add these extra students? I would prefer using transfers and exchange students. This allows the College maximum flexibility in terms of numbers and planning. Got more students studying abroad than you planned, just let in more exchange students. Once extra students are admitted to the class of 2013, we are stuck with them. Transfers/exchanges also allow for some targeting by major. Aren’t economics classes still absurdly oversubscribed? In that case, we shouldn’t let in any more economics majors. That’s tough/impossible to control for first years. With transfers/exchanges, we could focus on those majors (physics? art history?) with lots of room in upper level classes.

It is also easier to be somewhat less then need-blind in admitting transfers/exchanges. For one thing, I bet that the applicant pool is much richer in general. (True?) So, even with completely need blind admissions, you will pull in more money.

Morty talked more about internationals. He would like Williams to be able to say, “We take the best in the world,” but “we could live with” changing that in regards to need-bling international admission. It’s Morty’s call; he’ll have to think about it.

Just like Williams president Harry Garfield had to “think about” all the Jews that Williams was admitting 80 years ago. Again, the easy solution here is to develop relationships with international schools that have middle/upper class students.

The faculty are Williams. Can we use this freeze to get a bunch of GREAT new faculty?

This is what the college did when it expanded the faculty in ‘00-’01; there was an economic slowdown, and these folks now coming up for tenure are great. Williams will get as many tenure track faculty as possible, but no visitors.

Bit of spin there. The College decided to expand the faculty early in Morty’s term and, around the same time, there was an economic slowdown. But these two facts are hardly related and, moreover, the slowdown had a minimal impact on who Williams got to hire. (The pool of schools that we compete with were hiring as well.) I agree that the faculty hired during that era are great — shout out to Professor Siniawer — but am unaware of any evidence that they are better than the faculty hired in the years just before or just after.

The cost of Winter Study travel

This is something dependent on income, and Morty would like to do away with a Williams education at all dependent on the student’s income.

And if a rich student brings a BMW to campus will Morty ensure that the poor students have access to BMWs as well? Snark aside, there is nothing wrong with making the Williams experience as equal as possible, but there are limits to what the College can accomplish. Ensuring that poor students can go on Winter Study boondoggles is relatively low in my list of priorities.

We have 265 million in debt; unlike other institutions, we have real raw wealth; our debt isn’t leveraged. US News is stupid for not looking at net wealth. This year, the college only drew 4.1% from the endowment.

It is tough to be clear on what Will understands Morty’s point to be here. My summary: US News is stupid because it looks only at a college’s raw endowment (its assets) without considering its debts. That is, obviously ridiculous. Williams does not (as of June 30) really have a $1.8 billion endowment. It has a $1.535 billion endowment: $1.8 billion minus $265 million in debt.

Now, Williams is, obviously, still levered. (And that leverage has been a horrible idea for the last two years.) But the larger point — that Williams is better off than the vast majority of schools — is still true.

Does Morty protest too much on the leverage issue? Perhaps! I am starting to suspect that the College had de minimus debt prior to Morty’s arrival and that he went along with (if not pushed for) the hundreds of millions of borrowing that the College has done since 2000. If Williams had not issued that debt, we would be tens of millions of dollars better off today.

We had no lobster dinner!

Yes, but we’re buying organics for a fortune, though it should be good for us students in the long run, health wise.

Transparency, please! Just how much does the lobster dinner cost? How much extra does the College spend on organics? (And, needless to say, there is not actual, you know, scientific evidence that organics improve longterm health.) While Williams is rich, it can embrace all aspects of Stuff White People Like. When the market is down 50%, posturing becomes more problematic.

Again, thanks to Will for his amazing notes. They were read by thousands of Ephs and appreciated by all.

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