By ERIC GIBSON
We can now add colleges and universities to the list of victims of the financial crisis. The stock-market collapse has badly eroded endowments, forcing schools to suspend capital projects, freeze hiring, rethink need-blind financial-aid policies and cut budgets. The Journal reported this week that Harvard University's giant-killer endowment, which stood at $36.9 billion as of June 30, has lost 22% of its value in the months since and that the university's administration is planning for a 30% decline for the fiscal year ending next June.
In a letter to the Harvard community two days ago, President Drew Gilpin Faust announced that the school is "reconsidering the scale and pace of planned capital projects, including the University's development in Allston, and . . . taking a hard look at hiring, staffing levels and compensation." Many private colleges and universities are doing the same thing. In response to falling endowments, some have considered suing their brokers for putting funds into risky investments, while others are trying to get a slice of any future congressional stimulus package. Can clamor for a bailout be far behind?
Incredibly, one or two schools have even contemplated making up their shortfalls the old-fashioned way -- by increasing tuition. If you'll pardon the pun, that's rich.
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