In an email to the University community on Monday afternoon, Chancellor Mark Wrighton laid out the results of the administration’s efforts to cut costs while continuing to develop the school’s endowment for fiscal year 2011 and beyond.

Wrighton highlighted some measures that have been taken to reduce expenditures. Among other initiatives, the cost plan for fiscal year 2011 includes the elimination of 25 part-time and full-time employment opportunities in addition to approximately 25 unoccupied positions.

“These human resource reductions have occurred in central administrative areas and in the Danforth Campus schools,” Wrighton wrote. “Individuals who have lost their jobs were given advance notice, severance, and job search assistance…Overall, reductions in staffing and in non-personnel administrative expense in the central administration alone have reduced annual expenses by about $10 million, a 6.5% reduction, over a 2-year period.”

In addition, the administration earlier this year decided to eliminate the print version of The Record, what used to be a weekly newsletter highlighting events and people in the community. Now, The Record publishes exclusively online daily.

“In this instance [ending print publication of The Record], it is arguably the case that we have simultaneously reduced expenses, improved the effectiveness of our communications, and reduced the amount of paper consumed,” Wrighton said.

Other budget changes include the changing of health benefits programs, a reduction of spending on library materials, improved automation and distribution of personnel forms, reduction in landscape work, and improvements in energy efficiency. Particularly with regard to energy, the administration plans to install more automatic lights controls and more energy-efficient lighting in the buildings throughout campus and the South 40 residential area.

Despite the reduction in many of the University’s expenditures, Wrighton echoed the idea that both the academic programs and the financial aid availability at the University remain strong. He argued that the University remains committed to supporting those who cannot fund their education alone.

“We will continue to support the financial aid needs of our students,” Wrighton wrote. “Even though there are signs of a recovering economy, we know the recovery is uneven and additional financial aid resources will be needed in the future. We will continue to respond to changing needs in financial aid for students so they can complete their degree programs at Washington University.”

To achieve these ends, the University has ventured on the fundraising initiative Opening Doors to the Future: The Scholarship Initiative for Washington University. The goal is to raise $150 million by midyear 2014. So far, the University has raised $35 million.

In addition, the University has received numerous donations over the past year, including $30 for the John C. Danforth Center on Religion & Politics and over $100 million from the stimulus bill.

Students were disappointed in the cutbacks.

“Obviously change needs to be made so you have to do what you have to do,” freshman Sondra Polonsky said.

Others see waste in places that aren’t being addressed.

“I think that [the University] probably should spend their money places other than landscaping all the time,” junior Doug Richardson said. “Instead of putting in new grass every few days, they could spend it on something more useful.”

According to Wrighton’s letter, the endowment has been on a slow but steady rise over the current academic year. Since July 1 of last year, the endowment has gone up by 10 percent; but Wrighton noted that the board of trustees predicts that the endowment will decline by $10 million over the next year.

With additional reporting by Michelle Merlin

Called “A Fresh Look at Government Jobs: Civil Service in the 21st Century,” the event featured George Selim, a Department of Homeland Security employee who spoke with students at the Danforth University Center and attended a luncheon with them. A number of other government employees attended the event, including representatives from the Environmental Protection Agency, the Central Intelligence Agency and the Federal Deposit Insurance Corporation. Employees from the FDIC and the Department of Commerce held programs at the Olin Business School.

The event stemmed from a grant that created a partnership between the Gephardt Institute and the Career Center to promote government careers.

“With the economy being what it is now, students I think are more open to the idea of looking at different alternatives, including the public sector,” said Robin Hattori, program director for the Gephardt Institute.

Hattori also noted the need for young talent in government agencies to replace retiring government employees.

While the event was relevant to seniors who are considering pursuing government jobs after graduation, it also catered to graduate students, sophomores and juniors.

“People might not be ready to start looking for a job yet, but maybe a summer internship would be another option to look at,” Hattori said.

For Washington University law student Michael Wu, his internship created job opportunities on Capitol Hill. After working as an intern, Wu became a staff assistant and subsequently a scheduler for three different members of Congress. Wu is now enrolled in law school with the hopes of becoming a national security lawyer.

“Lawyers represent clients generally, and I feel like that’s not as exciting to me as the idea of trying to do good,” Wu said.

Senior Laura Lane-Steele is considering joining AmeriCorps during her gap years between graduating from the University and enrolling in graduate school for anthropology.

“I’m interested in working with people and trying to get on that community-based level,” Lane-Steele said. “I’m more of a public interest kind of person, and corporate America doesn’t really appeal to me in terms of social justice.”

Lane-Steele also finds the health insurance, benefits and non-discrimination policies that government jobs provide to be appealing.

In addition to providing opportunities to work for the public good, government jobs allow new employees to take on significant responsibilities.

“Most of the agencies have a lot of money for professional development and for training,” Hattori said. “The pay is not what you would find in the corporate sector, but to make up for it you really do get some great responsibility at the get-go.”

Hattori added that government jobs also provide mobility.

“Once you get in the government you can look at other agencies, and you can look at other departments within your agency,” Hattori said.

Undergraduates at the University are preparing for government jobs by selecting specific coursework.

Senior David Weisshaar, who has an interest in international policy and development, double majors in Latin American studies and political science with a concentration in international relations. He also minors in business.

“Having a little bit of quantitative skill I think is always useful in any government career,” Weisshaar said.

In addition to preparing for a government career through his majors, Weisshaar learns from the experiences of his fellow students.

“Just hearing their experiences, how they’ve gone about getting internships, the kind of perspectives they have on this field have certainly informed my own opinion and perspective on how I can best go about procuring a job in this field,” he said. Weisshaar also plans to pursue a master’s degree in public policy.

“I’m personally encountering a kind of skepticism among people in our general age range, 18-22, and a cynicism about government that I think is rather unhealthy,” Weisshaar said. “My personal viewpoint is that government is the quickest and most effective way to have an impact on public policy.”

“Government is a place where good can happen and inspiration can happen,” Wu said.

Other schools that made the honor roll include Swarthmore College, Harvard College and Lake Forest College.

According to Princeton Review spokesperson Rebecca Lessem, college-bound high school students and their families are increasingly concerned with finding not only the perfect college but also an affordable one.

“Financial aid is a really hot topic this year, and with the economy, financial aid is a big part of students and parents’ decisions in where they go to school,” Lessem said.

Derek Lam, a senior receiving nearly full financial aid, attested to this point.

“Truman State University offered me a full ride, but Wash. U. gave me a good enough financial aid package so that I could actually afford to come,” Lam said.

Senior Kevin Chang saidhe feels the University’s ranking is consistent with the reality of financial aid here.

“[The rankings] definitely seem pretty reasonable,” Chang said. “Wash. U. has been generous.”

To achieve maximum accuracy, the Princeton Review uses a number of methods when constructing rankings. The company gathers institutional data from administrators, including the percentage of students determined to have a need for aid, the percentage of need met, and the percentage of students whose aid was fully met. The company also uses student surveys.

“We try to reach as many students possible,” Lessem said.

The University evaluates students’ financial situation each year.

“Families complete financial aid applications that include information about their income, their financial position and family demographics,” said Bill Witbrodt, the director of Student Financial Services. “Based on that information, [a financial aid] amount is determined.”

But circumstances can change from year to year, and the University‘s financial aid department responds to these changes.

“Sometimes, [the government has] cut my financial aid, but the school has been generous enough to match whatever cuts the state made. I also have outside scholarships…the school will reimburse you [if necessary],” Lam said.

Although students are generally pleased with their financial aid, international students have a different perspective.

“I feel like at not just Wash. U., but at a lot of colleges in the U.S., just knowing that you’re an international student puts a strain on your eligibility on your financial aid…It’s already really competitive for international students, so [we feel] like, ‘Oh, I can’t ask for financial aid, because then I might not get in,’” senior Yu-Ching Cheng said.

Washington University also fared well on other Princeton Review ranking lists, placing fourth in Quality of Life, ninth in School Runs Like Butter, 10th in Best Campus Food, and 10th in Dorms Like Palaces.

Although the University took several cost saving measures over the summer, it continues to face an annual shortfall of about $30 million per year through the 2011 fiscal year and beyond.

The most significant source of trouble for the University’s finances is the continued decline of the endowment. As of June 30, 2009 the market value of the endowment, about $4.2 billion, is down by 30% from its peak value of two years ago.

“This downturn is very significant and has resulted in a decrease in endowment payout of $9 million,” Wrighton wrote. “We anticipate additional years of lowered payout, and are planning for another $9 million decrease in FY11.”

This is a breaking news update. Continue to check StudLife.com for more information.

We admit that closing down the center reflects poorly on the University’s external image. The economic crisis that led to the cuts in the University’s operating budget can be partially attributed to a lack of prudence in big business, and the Jeff Smith and Timothy Kuklo scandals demonstrate a lack of ethics in faculty members’ actions. Symbolically, it would seem that the center acted as a foil to these problems, demonstrating a University commitment to the pursuit of ethical actions across disciplines.

However, the truth is that perhaps tailored commitments to ethics can be individually pursued in each school. In the medical school, aspiring doctors can still be taught medical ethics. In the law school, aspiring lawyers can continue to argue about the nature of these ethics. In the business school, new rules for sharing information and bundling derivatives will continue to emerge as we rebuild our economic structure. And in the philosophy department, the study of ethics will continue to be vibrant—that is, provided that the student body continues to engage with issues surrounding the study of ethics and human values.

Our endorsement of the University’s decision does not come without careful consideration of the administration’s operating budget. Difficult changes have been made elsewhere—for example, the delay of construction on the South 40. It appears thus far that the University is avoiding sacrifices to the things most important to inner University well-being: professors’ salaries and student financial aid.

Our endorsement also does not come without another prescription: We ask that the administration take strides to ensure that the center’s programmatic benefits continue. We ask that the University continue to bring in speakers such as Peter Singer and Carl Bernstein for the Assembly Series—speakers who encourage us to consider and reconsider the ethical implications of the way we live. And we ask that administrations at the different schools at the University continue to emphasize the importance of an ethical education as well as an intellectual one, especially as we move into an era with fewer excesses.

The national debt projected by the Obama administration will hit 20 trillion dollars, or at least hit 100 percent of national GDP. However, the administration has not offered a clear plan of how they will reduce the national debt. The “Cash for Clunkers” program merely resuscitated a terminally ill economy: It staves off the inevitable disaster unless drastic overhauls are conducted.

It has been a rough few months for President Obama, but now that the media has finally seen President Obama cannot part the seas, the American people must realize that non-social policies in place are hard to change, especially in a terrible economy where voters are hesitant to place much focus elsewhere while they try to keep their jobs and put food on the table.

As an Independent voter, I resent both the previous administration’s and the current administration’s economic policies. President Bush’s idea of a “trickle down economy” left the lower socio-economic groups only with tears trickling down their faces, and the administration increased the national debt even more by cutting taxes. And on the other end of the spectrum, President Obama’s administration predicts almost 20 trillion dollars of debt, yet Obama has busted the Treasury trying to fund several new federal programs, some of which are grants where the money will not be returned. For example, much of the scientific community celebrated when many restrictions in research, especially stem cell research, were revoked. However, due to the worsening economy, much of the federal funding has been cut to scientific research, leaving eager scientists with freedom but no money.
But these effects are on a larger scale, and can only be fixed when normal law-abiding citizens make necessary changes to the American lifestyle. Gone are days when you could purchase a $500,000 home on a $40,000 salary. The American dream was a pursuable goal in the post-World War II era, when people spent more than they had yet still could afford luxurious items. Now, people are realizing the true meaning of credit and debt and that money must be saved and spent wisely. Similarly, we must pressure our congressmen who are still from the era where everything could be placed on a bill, and that bill could be paid later. To remain one of the greatest countries in the world, we must first repay our debts (imagine being “repoed” by China) and restructure our internal budget systems so that we do not end up paying for unnecessary expenses, like a senator’s private jet for “campaigning purposes.”

Overall, we must make some changes, because our generation has to foot the massive bill. And no matter how much the current politicians tell us we’re “pre-approved,” we can’t put it on another credit card with a higher limit.

Chancellor Mark Wrighton says the endowment spending amount will decrease on July 1 and may continue to decrease for the 2010 school year. (Sam Guzik | Student Life)

With the nation dealing with an economic downturn and an increasing unemployment rate, universities and colleges are trying to take prudent steps in investing their funds after drastic reductions in their endowments.

“What we are trying to do, in this era, is to take prudent steps to make sure that we can thrive as we look to the future,” Chancellor Mark Wrighton said.

Because audited reports are released annually, Washington University’s endowment figures are not available during the course of the fiscal year. However, Wrighton estimated that as of the end of December, the University’s endowment was down by about 23 percent compared to the previous fiscal year.

Many universities are reporting large losses in their endowments—losses that seem to echo the 1970s, when the University reported similar financial problems.

“Back in the fiscal year of 1973, there was no increase in the endowment payout [for] Washington University,” Wrighton said. “And then the next fiscal year of 1974, there was a reduction of 10 percent of the spending from the endowment.”

The University also experienced endowment losses between 2000 and 2002. Despite its losses, the University did not have to reduce the spending from the endowment.

The University based this spending on how the endowment fared during the previous five years.

“This July 1, we will have a new spending amount, which may be down about 2 percent,” said Wrighton, when asked to project next year’s endowment spending. “But the next July 1 of 2010 might see a steeper decline if the value of the endowment does not improve.”

Forty percent of the University’s endowment is invested in public equities or publicly-traded stocks.

The endowment’s value can be increased by two means: by receiving new gifts and by making investment decisions that will yield growth in value. The Washington University Investment Management Company, under the direction of Chief Investment Officer Kimberly Walker and a separate committee of the Board of Trustees, decides the target location, strategy and allocation of the investment.

Despite the current economic instability, Wrighton expressed confidence that Walker and her team have solid plans for the University’s endowment.

“We are always looking for new opportunities,” Wrighton said. “In an environment like we are experiencing today, I do not think we have much forward visibility in terms of what will be happening again of the traded companies. But I believe the diversity that we have in our investments is one strategy that should serve us well.”

Compared to previous investment strategies, which mainly concentrated on stocks and bonds, the University now invests in many additional sectors, including real estate. By diversifying the allocations, the investment company and the chancellor hope the problem of one sector is mitigated by the promises of another.

“Tuition has increased,” he said. “But, it is the lowest increase in more than 10 years in terms of percentage. We are trying to retain great faculty, to make sure we have exciting programs and to be able to operate the University; we know we need to make sure we have the revenue stream.”

The state of the economy has had a profound impact on the job market. According to the Bureau of Labor, the national unemployment rate rose to 7.2 percent in December, with employers shedding more than half a million jobs.

Students recognize that the tighter economy may mean a tougher job search.

“I’m kind of looking at a list of things—jobs, grad school, whatever opportunities might come up,” senior Gregory Auclair, an English and international and area studies major, said. “I think the opportunities are out there—you have to find them.”

“There are always places for really talented people,” Chancellor Mark Wrighton said.

Institutions of higher education worldwide are feeling the effects of the crisis on their endowments. The University’s endowment dropped sharply in the 2008 fiscal year, falling about 25 percent from its all-time high of $5.66 billion to $4.22 billion, as of Dec. 3.

The administration is now cutting back on hiring, but will still add some new staff.

“Even though we are not constrained we will be careful. We do not have a hiring freeze and we will be adding faculty,” Wrighton said. “We are recruiting right now. We will be doing this selectively.”

Staff consolidation is taking place. According to Wrighton, the University will not lay off professors.

The funding used to employ researchers on campus is variable. If the University does not receive sufficient funding, in the form of grants, the school will not be able to keep as many research scientists on staff.

Despite the volatile state of the economy, University research funding remains strong.

“We’re a very strong research institution,” Wrighton said.

According to Wrighton, the University has recently received a number of research grants.

The University received a grant of $12 million in order to forward research into clean coal technology. The Danforth Foundation also made a contribution of $10 million to the endowment for medical research.

Wrighton expects that the federal government, with the incoming Barack Obama administration, will play a role in expanding research opportunities at the University.

“The federal government, particularly the National Institutes of Health (NIH), is our largest single sponsor,” Wrighton said. “President-elect Obama in his campaign said he would favor doubling the NIH budget over 10 years.”

But many are concerned about how the current economy affects the University’s ability to extend financial aid to current and future students.

“Considering I plan to go to graduate school, I would prefer if at all possible to not have too much outstanding debt from my undergraduate education,” freshman Jacob Witt said. “In this economy, I have no idea if any funds will be available to help me with this concern.”

In reaction to the economic turmoil, the University anticipates increasing financial aid.

“We are in a position to be more responsible year after year,” Wrighton said. “We hope we can expand the investment. We’re going to strive to have an increase in financial aid that is greater than the increase in tuition.”

Director of Student Financial Services Bill Witbrodt wrote in an e-mail to Student Life that the University will work to ensure that all currently enrolled students will be able to graduate despite any unexpected financial troubles they may encounter.

“I can confirm that Washington University will not let finances stand in the way of enrolled students’ ability to complete their programs and graduate on time,” Witbrodt wrote. “This has always been the position of the University. It’s part of our department’s mission statement.”

So far, Witbrodt said that the University has not seen a measurable increase in financial aid requests but that if they do, the University plans “on being as responsive as it has in the past.”

Despite the financial fallout, Wrighton is confident that the University will persevere.

“Our business is very strong,” Wrighton said. “We’re doing very well.”