Endowment dips as stock market tumbles
Liz Essley
Issue date: 10/2/08 Section: News
The Hillsdale College endowment has lost approximately $4.5 million since July, but administrators say it won't affect student tuition immediately, if at all.
The stock market's recent roller coaster ride has translated to a 1.6 percent drop in the $282 million endowment over the last two months.
"It's difficult for me to say that that's significant at this point," said Chief Administrative Officer Ken Cole. "We have 10 more months in this fiscal year. Am I pleased? No. The endowment's down. But in light of the volatility of the markets, that [1.6 percent drop] is probably not too bad."
The college endowment, a collection of assets generally given by donors, accounted for $16 million of the $78 million operating budget for the 2008-2009 school year.
The money usually provides for faculty chairs and student scholarships, although it also used for campus maintenance and other expenditures, Cole said.
The endowment drop should not affect students at all this year, but could in the future if the trend continues, Cole said.
"It means more for the college than it does for the students, in terms of the impact," he said. "As the endowment decreases, there's less income available for various purposes: chairs, scholar-ships, etc. If we pass that reduction onto the students, that means that students would have to come up with more of their income to make that up."
Cole said the college could either find a way to increase donor revenue or increase tuition to make up for endowment losses, though he didn't expect tuition hikes in the short term.
"If it's a long-term situation, if markets continue to be volatile for one to two years, yes, I could see an increase in tuition," Cole said.
College President Larry Arnn said the decision would be made carefully.
"The college is pretty tightly run and we'd like to keep it that way. We don't like having to cut anything, but if we do, it'll be painful and we'll have to think about it," he said.
The stock market's recent roller coaster ride has translated to a 1.6 percent drop in the $282 million endowment over the last two months.
"It's difficult for me to say that that's significant at this point," said Chief Administrative Officer Ken Cole. "We have 10 more months in this fiscal year. Am I pleased? No. The endowment's down. But in light of the volatility of the markets, that [1.6 percent drop] is probably not too bad."
The college endowment, a collection of assets generally given by donors, accounted for $16 million of the $78 million operating budget for the 2008-2009 school year.
The money usually provides for faculty chairs and student scholarships, although it also used for campus maintenance and other expenditures, Cole said.
The endowment drop should not affect students at all this year, but could in the future if the trend continues, Cole said.
"It means more for the college than it does for the students, in terms of the impact," he said. "As the endowment decreases, there's less income available for various purposes: chairs, scholar-ships, etc. If we pass that reduction onto the students, that means that students would have to come up with more of their income to make that up."
Cole said the college could either find a way to increase donor revenue or increase tuition to make up for endowment losses, though he didn't expect tuition hikes in the short term.
"If it's a long-term situation, if markets continue to be volatile for one to two years, yes, I could see an increase in tuition," Cole said.
College President Larry Arnn said the decision would be made carefully.
"The college is pretty tightly run and we'd like to keep it that way. We don't like having to cut anything, but if we do, it'll be painful and we'll have to think about it," he said.
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John
posted 10/09/08 @ 12:09 AM EST
Save the economy - Vote Obama/Biden '08.
Eight years of the Bush/McCain economy is enough!
No way, no how, no McCain
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