Friday, December 5, 2008
The KU Endowment Association’s investments have taken a bigger hit than expected from the global economic crisis, the association reported Thursday. Although renewable scholarships are safe, fewer new scholarships may be awarded.
The association announced Thursday it would decrease monetary support to the University of Kansas by 10 percent for the 2009-2010 school year. The association’s president, Dale Seuferling, said in a letter that returns from the endowment’s long-term investment program declined by 26.6 percent from July 1 to Oct. 31, prompting the association to take dramatic action.
“At this time we need to make these reductions for the coming year as a means of mitigating the possibility of greater reductions in future years,” he said.
The association’s announcement came at the heels of Harvard University’s announcement Wednesday that its endowment had decreased in value by 22 percent in the last four months. Harvard projects that the value of its endowments would drop by another eight percent before the end of its fiscal year, June 30.
Seuferling’s letter also followed a Nov. 18 article in The University Daily Kansan in which Jeff Davis, Endowment senior vice president for finance and treasurer, said, “I don’t think there’s a time we will not be able to operate normally.”
However, Seuferling said that the context of the article dealt only with spring 2009 financial aid and not with future semesters. Additionally, he said the situation is more grave than it was at the time of the story’s publication.
“Things can change a lot,” he said. “They’ve gotten worse. Let’s just hope that’s not the same response I have in January or February.”
Seuferling said that although students who have already been awarded renewable scholarships and professors in endowment-funded positions are safe from the cuts, fewer scholarships could be available for other students.
Chancellor Robert Hemenway was out of his office Thursday and was unavailable for comment. However, Marlesa Roney, vice provost for student success, agreed with Seuferling’s prediction.
“I think that’s very much a possibility,” said Roney, whose office handles the bulk of general scholarships. “What we don’t know is what donors might do.”
Roney said that donors who have major financial resources available sometimes contribute money for the University to spend immediately in situations like this rather than over time in an endowed fund.
“I think the important part is that student scholarships will remain a top priority, especially those that are renewable,” she said.
Incoming freshmen and transfer students also might suffer from a lack of financial aid in the form of scholarships. This could make attending the University less attractive and drag down the University’s national rankings.
“Unfortunately it does present a challenge, but at the same time, all other universities are dealing with the same reductions, or the same situations,” Seuferling said.
Lily Boyce, a Lawrence sophomore on a renewable endowment-funded scholarship, said she was not worried about her scholarship.
“I’m not worried at the moment because they told me not to worry,” she said, referring to an e-mail she received Wednesday from the University assuring her that she would continue to receive her scholarship. “Maybe I should, but for now, I trust them.”
Daniel Foiles, Lenexa sophomore, said that he was not worried, but that the University’s letter opened his eyes to the reality of the situation.
“If KU says that my scholarships are safe then I believe them,” he said. “I guess the only thing that worries me is I didn’t realize that my scholarships could be taken away for any other reason besides me not completing the academic requirements.”
— — Edited by Rachel Burchfield
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Comments
Endowment’s contribution to the University will decrease by 10 percent next year
I thought that the Endowment just set a record for how much money they have. What are they stashing it for? This is a recession, and time to be more liberal with the spending.
Endowment’s contribution to the University will decrease by 10 percent next year
This is atleast kindof scary.
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