Are you worried about the economy because it may be difficult to get a loan for next year’s tuition, or because it will be harder to get a job post-graduation? Well, take that concern and magnify it by the amount the Dow Jones Industrial fell yesterday, and you’ll have an idea of the weight sitting on the shoulders of the heads of multi-million dollar corporations – not unlike our own University.
Colleges and universities nationwide have reacted to the devastating economic downturn – not to mention decreased endowments – by slashing budgets left and right.
Dartmouth College plans to reduce its budget by 10 percent in the next two years after a $220 million endowment loss. Brown University and Cornell University have both frozen hiring, and many other universities are delaying construction, merging departments and eliminating programs to reduce operating costs as much as possible. Other schools, like the University of Vermont, are even projecting deficits as large as $20 million in the coming years.
GW has been no exception to the endowment losses plaguing institutions of higher learning. On Oct. 16, The Hatchet reported a decrease of 3 percent in the last fiscal year, the first loss since 2001 (“Endowment faces first loss in years,” p. 1).
Since GW depends more on tuition money than other investments, we have only experienced a moderate loss. But is this any excuse for not practicing fiscal restraint?
In the same article, Executive Vice President and Treasurer Lou Katz explained that “We are not starting or stopping any projects, but we are not ignoring this situation.” A university’s budget is an incredibly complicated matter of which I cannot hope to understand the nuances, and I have full faith that our administrators are not stumbling blindfolded through this fiscally dangerous maze.
Still, it is hard to ignore that while other schools are trimming the extras off their expenditures, GW just keeps on spending. We are still early in the game in reaching the pledged $15 million for renovations to the Smith Center, have numerous oncoming construction projects and are now considering a science center that would cost between $180 million and $270 million at best.
We may not be in as financially vulnerable a situation as some other schools, and thankfully are not forced to make difficult decisions like cutting staff. Still, there must be some kind of balance between downsizing and ceaseless spending.
At the very least, GW must keep the students and parents informed about how and why money is being spent, holding itself accountable for every dollar. Students and families are worried, and while GW has done well in increasing the financial aid budget, families need to understand where all this money is coming from, and why its being spent.
At some point or another, we have all been told by our parents, “Well, if your friend jumped off a bridge, would you do it too?” In this case, GW should examine why everyone is so eager to jump, and explain to its students why it should or should not follow suit.
And, you never know, there may be a soft landing at the bottom.
The writer, a senior majoring in psychology, is Hatchet contributing opinions editor.