Lawrence University has proposed to freeze salaries for the coming academic year, reduce financial aid by .5 percent, and make an extra effort to hold or reduce non-personnel costs in response to continued complications from the recently reduced endowment.In a recent letter to faculty, President Rik Warch explained the financial situation of the university, noting that Lawrence has already taken steps in recent years to reduce expenses, and these actions have carried into the current fiscal year.
In part, the money-saving efforts are a response to a significant drop in the endowment, from which the university is still recovering.
According to Greg Volk, Vice President for Development and External Affairs and Executive Vice President, “The past three years have been challenging ones for Lawrence’s endowment, and we have see the endowment drop from an all-time high of $188 million in Dec. 2000 to a low of $143 million in September of 2002.”
Volk continued, stating that the endowment itself has rebounded, but “the distribution from the endowment for the college’s operating budget has remained essentially flat.”
To improve the financial situation, the school seeks to reduced expenditures for the next fiscal year in the hopes to capture $1.25 million. To that end, the school is also considering plans for the early retirement program, reducing expenses in areas such as athletics, and the capital budget.
According to both the Volk and the letter from Warch, many other colleges and universities have had to implement similar measures in recent years due to the downturn in the economy. In his letter, Warch noted, “Many colleges and universities, even those with considerably more resources than ours, are facing budgetary pressures.” Volk noted that Stanford University imposed a salary freeze for all faculty and staff this year facing a $20 million deficit.
Warch deemed the proposed measures a “financial necessity.” The measures, Volk said, only be a temporary: “While we would all like not to have a salary freeze for all Lawrence Faculty, it appears to be an essential and one-time step in addressing our financial challenges.”
Warch noted that the school has met similar financial challenges in the past, referring to the late 1970s and early1980s when Lawrence faced comparable economic difficulties, and “emerged from them as a stronger institution.”
Warch closed by saying, “I have every confidence that the community will rally to achieve comparable results in the current instance.