As the biting, icy winds subside and the dark days of winter brighten into spring, GW not only enters a new season, but also a new fiscal era, during which administrators will be forced to make difficult decisions about University funding. But how can administrators provide the nurturing care for GW’s planned growth while also enduring the financial crisis?
This question is ultimately for the GW administration and Board of Trustees to answer. But with the University debt swiftly approaching $1 billion, and the recent approval of $10 million for the proposed building of the Science and Engineering Complex, I am hopeful that GW will avoid spring fever spending and not scatter its precious monetary seeds across the wrong fields.
According to The Hatchet’s article “Debt nears $1 billion,” on March 5, the University borrowed about $200 million through the sale of bonds and brought the total outstanding debt to $973.3 million. While a portion of the money will go towards paying off previously acquired debt, it remains unclear whether the remaining $110 million will be kept in reserves or if it will be used to fund construction projects.
Two different agencies confirmed GW’s favorable financial ratings, which aided in the expediency of transactions with investors. Investors cite GW’s “strong enrollment figures, growing philanthropic support and consistent cash flow” as major factors in their decisions.
Yet the move has increased both GW’s total amount of debt and the pressure on the tuition-based University to keep enrollment steady.
Although we want to remain among the ranks of very selective institutions, to maintain the steady influx of tuition dollars, the GW admissions office may unfortunately have to shift its focus from a high quality to a high quantity of incoming students. As GW economics professor Anthony Yezer said, “We are gambling that students will still want to come here in the future and pay the tuition and pay the dorm costs.”
Similarly, a burning question raised by a recent Hatchet staff editorial “Full Speed Ahead?” remains unanswered: What is it that makes GW’s economic situation so “favorable” and unique that the University is still willing to move forward with costly construction projects? Our neighbors at Georgetown halted development of their own science building, while many similarly tuition-based schools such as Boston University have initiated hiring freezes or budget cuts.
During such a severe recession, any significant fiscal move can turn into a gamble. The uncertainty of the situation merely reinforces the idea that GW needs to spend the borrowed cash wisely, that is, in ways that will encourage strong enrollment and convince future students to continue to pay our high tuition.
Professor Yezer said that “You’re not going to borrow this much just because you’re afraid and need money for scholarships” speculating further that the construction projects will receive a majority of the remaining funds. But administrators should think twice about simply funneling money into the Science and Engineering Complex, as if nothing has changed. Perhaps they could save most of the money for other, less expensive projects, such as the much-needed and called for renovations of Gelman Library.
If GW does insist on spending the cash now, and spending it on construction, administrators must refrain from concentrating on one specific area of development. After all, as spring finally arrives, we are reminded that those “fields” of the University which encourage students to come, despite tuition levels, should receive the proper care during this ongoing fiscal frost.
The writer, a freshman majoring in journalism, is a Hatchet columnist.
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