Connecticut College News

President Higdon confirmed a $40 million decrease in the College´s endowment on Monday in an article in New London´s "The Day". Despite this loss, which constitutes a 25 percent drop in the endowment, both Higdon and Paul Maroni, vice president of finance for the College, maintain a certain composure and quiet confidence about the status of the College during the present economic crisis and recession. In a message to the college community on Nov 6, President Higdon remarked, "The College entered this very difficult economic environment from a position of financial strength," showing a record-high endowment of $225 million at the fiscal end of 2007, and despite the capital markets decline in 2008, the endowment held fairly steady and finished the fiscal year at $215 million. Higdon and Maroni admit that since June, the College´s endowment as fallen along with many other college and university endowments across the country. That said, the losses constitute much less than the overall equity market decline, according to Maroni. Maroni and Higdon both praise the College´s prudent financial management team in minimizing financial losses. The purpose of the College´s endowment is to "supply ongoing support to the college into perpetuity" and provide "intergenerational equity" for future classes, said Maroni. As one of the revenue sources for the College´s operating budget, the endowment as a whole is invested for the long-term: that is, the college uses a well-diversified portfolio and invests in a number of broad categories in order to minimize the risk of fiscal losses. Higdon and Maroni also maintain that some adjustments will need to be made to upcoming plans and projects for the school, but those that take effect will not be drastic. "Provided the economic environment does not deteriorate materially from here, we expect to slow spending growth somewhat compared to the increases of recent years," said Higdon. This means a slower rate of spending around campus rather than a freeze or complete halt to upcoming plans and projects, said Maroni. Many students may wonder what changes will occur to daily life on campus as a result of the drop in the endowment. For one, the majority of construction projects occurring on campus will not be postponed, since these projects are funded by gifts for the most part, said Maroni. This, Higdon said, is because "the College undertakes capital projects only if they are fully funded and, in certain cases, only if we have established an associated endowment to help fund their incremental operating costs (as we did in the fitness center, for example)." The College has also been able to minimize any changes in financial aid packages, says Elizabeth Hook, associate director of financial aid. In fact, Maroni said that the College increases the Financial Aid Budget every year as tuition increases. In anticipation of changes in the economic status of students´ families this year, Maroni maintains that the working assumption is that the increase in financial aid -- i.e., grant money -- from 2009 to 2010 will be twice that of the increase from 2008 to 2009. With regards to student grants, it is important to note that only about 10 percent of the College´s grant money is supported by the endowment. The bulk of the College´s grant money is supported by the operating budget, whose three main sources include the students´ comprehensive fee, the college´s endowment and gifts made to the College through the Annual Fund. Because the comprehensive fee -- i.e., tuition, room, & board -- composes 80 percent of this budget, Higdon stresses the importance of meeting enrollment targets and high student retention rates if the college hopes to avert any major changes during these rough economic times. Higdon said students should rest assured that College officials will continue to pay close attention to the endowment and financial markets that affect it. The maintenance and growth of the College´s endowment is, for President Higdon, "a responsibility I take very seriously on behalf of the College. Our ultimate goal - one that I know is shared by faculty and staff across campus - is to continue to provide this extraordinary education to the best and brightest students from all walks of life."

For media inquiries, please contact:
Amy Martin, 860-439-2526, a.martin@conncoll.edu or Deborah MacDonnell (860) 439-2504, dmacdonn@conncoll.edu