While some of the world’s wealthiest universities are freezing hiring, delaying construction and deferring upcoming projects, GW has largely been able to “stay the course” in the failing economy, top administrators said this week.
Because GW’s budget is heavily dependent on tuition dollars, few major adjustments are needed to brace against the volatile markets affecting endowments, administrators said. Wealthier schools like Brown and Harvard universities – where as much as one-third of the budget comes from endowment earnings – must cope with “a 30 percent decline in the value of college and university endowments in the current fiscal year,” projected by Moody’s Investors Service.
Administrators said they are monitoring the economic crisis carefully and are making adjustments like boosting financial aid, but GW will not freeze salaries – as Brown and Cornell University have done – or defer upcoming construction projects – a move advocated by presidents of Dartmouth College and Harvard.
“We aren’t making some of the choices that other universities are making because we don’t have to at this point,” said University spokeswoman Tracy Schario.
Instead, the University recently hired 60 new full-time faculty members this fall, according to media relations. Schario said the school will continue to offer pay raises for both professors and administrators and has no plans to alter its construction schedule. Executive Vice President and Treasurer Lou Katz said the University is considering hiring more faculty members than usual because the action in D.C. can attract more professors.
“I’m very optimistic about the quality of professors we will attract,” Katz said. “Washington is becoming more of a hub than ever, which means we will be able to hire faculty now that we would never be able to.”
Since GW relies so heavily on tuition, attracting a large number of applications is vital to the financial health of the University. Robert Chernak, senior vice president for Student and Academic Support Services, said in an interview that the rise in applications so far this year is a positive sign.
Another financial buffer may be GW’s location in downtown D.C. With a new administration moving into the White House, the local D.C. economy is not deteriorating. This may be attracting students to Foggy Bottom, administrators said.
“You’ve got to remember that the Washington economy is really different,” said David Wheeler, a reporter from the Chronicle of Higher Education, in regards to GW’s high number of early decision applications. “Good times and bad, consultants make money here and the federal government is not going to go out of business.”
Katz said that in addition to GW’s traditionally strong political science and international affairs programs, finance and international business programs may also draw prospective students to the school.
“The world money capital is now Washington,” Katz said. “What is happening is, all countries are coming together to solve a common problem. It has made Washington the center of finance.”
GW is one of the largest landowners in D.C. after the federal government and two to four million square feet of office space will be needed in the coming years as more bureaucracies form around Washington, according to The Washington Post. Property along Pennsylvania Avenue, such as the World Bank headquarters and the 2000 Penn complex, is increasing in value, according the Post.
“Washington’s real estate market has held up very well,” Katz said. “Instead of rapidly decreasing like pretty much everywhere else, we’ve held up very well.”
While this crisis may continue for a few more years, GW has the opportunity to protect students and the University from falling behind.
“I think we will exit this crisis as a stronger institution than when we came in,” Katz said. “We are going to make sure we take advantage of the increasing opportunities.”