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 Economic crisis wreaking havoc on colleges and universities - Oct 03, 2008
posted by: Howard Smith
The economic crisis is impacting virtually all areas of society, including the day-to-day operations and future economic outlook for colleges and universities all over the country. Over 1,000 colleges and universities invest in a $9.3 billion short term, supposed low-risk fund called CommonFund. Earlier this week, Wachovia Bank froze the fund and is in the process of liquidating and eventually distributing the fund's assets. With the freeze, colleges and universities are only currently able to withdraw a small percentage of their money. Some have been told that they will be able to have full access to their assets at the end of the year, although there is uncertainty on when this will actually occur. New York's Pace University, for instance, has $48 million invested in the fund, which accounts for 64 percent of its working capital. The school was told that it could only withdraw 34 percent of its money this week. That leaves the school in more than a $31 million hole, which undoubtedly it was counting on for short-term expenses. As a result, schools are being forced to look into other options to account for these missing funds. Some colleges and universities are tapping into their endowment funds to help support their daily operations. But with current state of the economy, the endowments of many schools have already decreased from where they previously were. For instance, Virginia Tech's endowment has shrunk from $527 million to $480 million since June 30. It would seem that this could hit smaller schools harder than anyone. How can a school with a small endowment and few boosters survive? If these economic problems linger, is it possible that will we see small schools begin to shut their doors? And how will athletics budgets become involved? Education is obviously a priority, and it would seem that many university presidents might view cutting an athletics team or two as an easy money-saver. Let's hope the economy is able to straighten out in the near future, else some of our biggest fears may become a reality. 
CommentsThis eventuality should come as no real surprise. Unfortunately, There is little or no coverage of this situation in the main stream media. I believe this reflects our (nations) view of education. Many view higher education as a privilege or an luxury. Instead, with the long and growing list of problems that we face (energy, finance, economy, international relations, domestic infrastructure demise, health care, global climate change, poverty, aids, etc.) it should certainly considered a necessity a (must have). Without an educated, inspired population base the US (even the globe) will fall behind and suffer or at least not prosper. Education (at all levels) is the key and should not be a partisan issue, but at the top of our priorities. So much advantage and good comes from and enlighten and educated populous...starting at pre-school. I agree there is just not enough coverage at the community and individual levels across all types of sectors. In months to come we could reasonably expect to hear some horrible stories as a result of the financial crisis. Please read this article for the causes. There are people to blame in this equation and they are not all the top level organisations. www.triplewitching.com.au Post a Comment |
  
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