This post is a summary (and archiving) of all the recent comments regarding cost-cutting that have appeared on “Speak Up”  in the last few weeks. They are all below the fold.  

Transferring the comments involves cutting and pasting, resulting in a sloppy presentation. I  welcome any suggestions as to how to do it more efficiently.

Please feel free to add to the discussion at any time.



  1. Dad13 says:
    A fairly detailed update on Middlebury’s cost cutting efforts.      

  2. nuts says:
    On Amherst’s cost cutting efforts.          

    President’s Update on Budget Issues
    February 3, 2009

  3. hwc says:
    For comparison, Bowdoin, Wesleyan, Middlebury, Carleton, Haverford, and Bryn Mawr all have Moody’s AA2 or AA3 long-term bond ratings.          


    4. Larry George says:

    More on Midd cost-cutting:

    One dining hall to close, one cafe closed, hours cut on juice bar, employee and other discounts for skiing and golf facilities to be cut, aid to internationals to fall (but number of internationals expected to remain about the same), staff cuts, Jan. term on the table, etc.

    Their endowment seems to have taken quite a hit but they also seem really worried about donation, which apparently are way down.

    Anyone have any idea about how donations are doing closer to home?

    5.Parent ’12 says:

    Oh- I feel for the students who use that cafe & juice bar, as well as the staff who do the serving. Middlebury has more students so that’s more of a crowd at meals.

    I thought January term was as much of a tradition as Winter Study is at Williams. I wonder if they’re thinking of starting Spring Semester early. Or, having a longer break.


    6.PTC says:

    Larry- … I hate to see good people hurt. But this crisis will hopefully force all of us to re evaluate what is important in life…

    There was way to much excess without any thought for the poor and working class. Maybe this will bring about some good. Maybe this will be the new- new deal, when we re grow our middle class and start to produce something again… we have been consumers for too long. We have not moved ahead in terms of eneregy and health care. We had a dotcom boom… but we are capable of so much more.

    I am watching Obama speak at CAT right now….


    7.hwc says:

    Middlebury has been “out of equilibrium” for several years (probably at least five, maybe more). Out of equlibrium means spending above the policy limit from the endowment each year. In Midd’s case, they’ve been spending above their 5.5% ceiling. They only post limited financial data on their website, so it’s hard to say how badly out of equilibrium, but their stategic planning hopped to get the spendind rate down to the targeted level by 2009.

    That obviously isn’t going to happen. Because they are already above their spending targets, they have nowhere to go. It’s not like they can offset a 20% endowment decline by moving their endowment spending up from 4% to 5%.

    They are hurtin. Williams has the luxury of taking a year or two to implement the tough cuts. Middlebury does not have that option.


    8.hwc says:

    Parent 12:

    I would not be shocked if the powers that be at Williams put Winter Study on the table for consideration as a potential cut. Whacking a big program like that might be easier than a thousand paper cuts.


    9.frank uible says:

    If acting conservatively, Williams probably should take one big cut and also a bunch of small ones – but very hard to screw oneself up to do. This board agonizes over a single small one. The College can’t merely print money as the U.S. will undoubtedly do in order to defer pain to the long term.


    10.frank uible says:

    In short Middlebury has been eating its seed corn for a considerable period during which it has been protected in some degree by financial growth, and if it continues to do so and if financial growth continues to be negative, then it will be heading for a major financial downfall.

    11.hwc says:

    Application numbers were printed in this week’s Record:

    Williams Record artice

    2008: 7,552 apps
    2009: 6,001 apps

    Basically back to the 2006 numbers from before the ridiculous bubble of the last two years.

    12. nuts says:

    Harvard University plans to trim its workforce by offering buyouts to 1,600 non-faculty employees in the wake of losing $8 billion, or 22 percent, from its endowment.

    The buyout will be offered to staffers aged 55 and older who have a decade or more experience, according to Marilynn Hausammann, vice president for human resources, in an e-mail to employees yesterday. Bloomberg was the first to report the news on its website yesterday.

    Harvard has 16,425 full-time and part-time employees, not including faculty. Its endowment is the richest in education.



    13.Parent ’12 says:
    HWC- Seeing that you provided the link (thank you) & application numbers plus knowing your entries on the effect of the difficult economy brought to mind the loss in revenue from application fees: $60 x ~1550


    14.sophmom says:
    This tidbit regarding the state of affairs at Amherst came to my attention today. It might be interesting to a few of you.


    15.hwc says:
    Thanks Sophmom.

    Amherst signaled that they would be issuing taxable bond debt for working capital last week. $100 million is a pretty big number.

    They started the fiscal year in July with $172 million in debt. They’ve will have now borrowed $150 million more since New Years.

    Ultimately, they are borrowing cash to pour into additional private equity and hedge fund partnership investments, which already account for 60% of their endowment. With additional leveraged investments, they sure better hope these partnerships show positive returns. If not, the leverage will just multiply the losses.

    It’s actually rather breathtaking. Amherst’s peers such as Williams and Swarthmore will be going thru a period of signficant belt-tightening and reining in of marginal programs, but there is nothing apparent that threatens the ability of these colleges to continue offering substantially the same product with solid financial underpinnings. Amherst’s liquidity issues make its challenges much more significant. These are the kinds of major mistakes that kill endowments for a generation and move a college down a tier. For example, before miscalculations they made in the 1970s, Haverford had a larger per student endowment than Swarthmore.

    I’m guessing the debt service on this new Amherst debt will be $3 to $5 million a year for 30 years. Those are additional cuts that will have to be made in operating budgets on top of what Williams and Swarthmore will be making.

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