reporter contentsalbright college
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The economy in free fall. Unemployment at record levels. Corporations “too large to fail” failing. Investments and retirement funds bottoming out. For higher education this meant endowments decimated. Parents and students struggling to pay for college. Fundraising down. Enrollment projections uncertain. For some schools, it has meant hiring freezes, cutting salaries, reducing benefits and even laying off faculty and staff. And while the economic picture for higher education is complex and unprecedented, there are also other major forces at work on colleges and universities. Higher education has been under fire for rising costs, pilloried for failing to demonstrate value and outcomes, and pressured to spend down “fat” endowments. Far-reaching program and curricular changes with potentially devastating effects for private colleges are being legislated. The popular press paints a picture of bloated faculty salaries, overgrown administrations, and students crushed by debt. And a new idea is being floated that a three-year degree will save money—and is all people need anyway. But there is also a new wind blowing with a renewed focus on education, increases in financial aid levels and opportunities, and some new studies that show college as more important than ever to our national economic progress. All of these forces are at work on Albright, but let’s begin with the big question. How is the economy affecting Albright? How is Albright Faring? All things considered, says president Lex McMillan, Albright is in pretty good shape. In early April, President McMillan stood up at town-hall meetings of the campus community to give a “State of the College” report. Deposits for fall 2009 remain strong and are ahead of last year to date. Accelerated Degree Programs are going strong. The Graduate Division enrollment has increased significantly. The Science Center construction is continuing without interruption. And despite major losses to the endowment, there was even an ironic good news twist to these losses. Although the endowment had dropped from an all-time high of $54 million at the end of May 2008 to an estimated $39 million by May 2009, its relatively small size means earnings provide a much smaller percentage of our operating budget than for better endowed schools. But the bad news was the need to cut $1.4 million from the 2009-10 budget. Tuition Dependence and Containing Costs Let’s begin at the beginning. Albright is a tuition-dependent institution. In the face of economic uncertainties and pressures for students and families and news reports of students “trading down” for less expensive educational choices, the College’s budget for 2009-10 was built on a conservative estimate of 1,570 traditional day students instead of 1,625—the goal of the College’s strategic plan. By early spring 2009, tuition, fees, room and board had been set for 2009-10 with the lowest possible increase—just 2.9 percent. Albright was far out in front among private colleges in the push to keep the total cost of attendance increase to under 3 percent. But with losses in the endowment, this modest cost increase was funded by eliminating faculty and staff salary increases, along with a hiring “chill.” Increasing Student Aid a Priority As the impact of the recession on students’ and families’ finances began to be seen last fall, the collective energy of the College was focused on a single goal - to keep Albright students in school. Growth in the financial-aid budget has exceeded tuition increases by four full percentage points over the past five years, but additional funds were directed to financial aid, and the Financial Aid Office worked tirelessly counseling and advising students. The combination of a modest increase in cost, lower enrollment, less revenue from tuition, higher cost of doing business, and declines in fundraising all added up to a projected $1.4 million shortfall in the operating budget. Creative Solutions to Minimize Adverse Impact The Chronicle of Higher Education has recently reported faculty and staff layoffs, reduction of teaching loads, reductions or eliminations in pension contributions, involuntary furloughs and across the board percentage decreases in salaries in colleges and universities. But, according to the president,
his hope was that drastic
measures could be avoided. The
immediate solution for Albright President McMillan charged a cross-functional Budget Review Task Force, led by five senior members of the faculty, to look for ways to operate more efficiently. In the end, the shortfall was handled through creative thinking – largely through divisional belt tightening and deferrals, the hiring “chill” becoming a freeze (except for a few mission critical positions), and changes in the amount of vacation that can be carried forward, which reduces the College’s liability and contributes to the bottom line. “There are far too many unknowns for us to relax yet,” says President McMillan. “While the recession seems to be slowing a bit, philanthropy is still down significantly, which is a major cause for concern. We are not out of the woods, but we remain hopeful.”
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There was good news. Traditional undergraduate applications were up by a
remarkable 26 percent—far beyond our benchmark schools.
The focus of The Fund for Albright also became providing financial aid to
students. And, despite no salary increases, the faculty and staff showed extraordinary
support of students by record contributions to The Fund for Albright—52
percent employee participation rate, with many departments achieving 100
percent participation.