Not even Fairfield’s nimble stag is able to escape the widespread economic meltdown that is gripping our country today.
On Oct. 17, University President Father Jeffery von Arx released a statement describing how the University is dealing with the slumping economy, and why he believed Fairfield will be able to fight through this tumultuous time of market vulnerability.
In the letter, von Arx said the school will undoubtedly feel the effects of the national recession, but the University has and will continue to manage the finances in order continue to remain ‘financially stable and healthy.’
‘We are examining the University’s financial position closely to ensure that we can overcome potential challenges,’ he stated in the message. ‘Thanks to our fiscally conservative budgeting policies and practices over time, I am pleased to report that Fairfield is financially stable and healthy.’
Despite von Arx’s campus-wide reassurances, Fairfield is among 46 Connecticut academic institutions that have $56 million frozen in a short-term investment fund that abruptly restricted withdrawals to prevent a run by investors, according to HartfordBusiness.com
Fairfield has between $10 million and $11 million dollars still frozen in the Short Term Fund. William Lucas, the vice president for finance and administration and treasurer at the school, told HartfordBusiness.com that the school will be able to cope in the near term because of its diversified portfolio. However, if it remains frozen, the fund could cause problems.
But according to a 2007 NACUBO Endowment Study, conducted by the National Association of College and University Business Officers, Fairfield’s endowment has increased from $214,759,000 in 2006 to $268,758,000; a 25 percent increase.
In terms on endowment, Fairfield falls somewhere in the middle amongst its Jesuit counterparts. Loyola University currently holds an endowment of $181, 530,000, while College of the Holy Cross holds an endowment of $658,885,000. In comparison to other Connecticut universities, Quinnipiac has an endowment’ of $223,008,000 while Sacred Heart boasts a measly $69,427,000 endowment fund.
Von Arx acknowledged that the University might be less attractive to students in the upcoming years because of the price tag, but did reinforce Fairfield’s commitment to financial aid for qualified incoming students.
‘We understand that college costs are a significant commitment for parents and have’ dedicated increasing resources to financial aid for our students,’ von Arx said. ’65 percent of our students receive some level of financial aid from the University, and total financial aid has grown to’ nearly $30 million. We will do all we can to help students and their families pay for a Fairfield education.’
Director of Financial Aid Erin Chiaro agreed with von Arx, and explained the various sources from which financial aid is taken. He also added that Fairfield ‘remained committed to the Bridgeport plan’ and confirmed that it will not be affected by the difficult economic times the country is facing.
‘Each year, the budget committee considers requests for funding and one of those requests is for financial aid,’ Chiaro said. ‘The actual source of the funding is all of the broad university sources of funding including endowment, grants and tuition revenue.’
Despite these claims to reliving some of the financial pressure, undergraduate students are feeling the heat when it comes to money, and admitted that the tuition for Fairfield might become a problem is their parents fail to maintain their level of income.
‘I had a good friend who had to drop out this year,’ said Kristina Lingo ’11. ‘Her parents worked in the financial sector, and because they had lost so much money, she just couldn’t afford to go here.’
Even students who are receiving financial aid packages from the school are feeling the economic crunch when it comes making ends meet with everyday expenses.
‘It seems like everything is increasing in price,’ said Genevieve Leclero ’11. ‘I would have definitely reconsidered coming here if it was like this two years ago.’
Aside from the financial aid aspect of endowment spending, research and advertising are also taking notice to the sliding. Stephanie Frost, director of university advancement, whose responsibilities include alumni relations and contributions, said it is still too early to tell what kind of effects the economy will have on her department directly.’ ‘ ‘ ‘ ‘ ‘
‘It is a little too soon to assess the impact that the current economic climate will have on contributions,’ she said.’ ‘So far we have not seen a decrease in annual fund gifts from alumni, but will continue to pursue gift conversations with alumni, parents and friends, foundations and corporations capable of considering major gifts to the institution including gifts to our endowment.’
In his letter, von Arx noted that ‘Fairfield will review all capital improvements and projects, based on the availability of resources.’ He ensured students that planning in advance will give Fairfield the ability to stay on its feet and wade through the murky waters of the recession in which our country currently finds itself.
Mark Reed confirmed von Arx’s statement and said no work stoppage has been ordered on any campus projects, including the renovation of the quad. He said Fairfield will continue to examine all of its decisions, but has yet to find it necessary to cut or delay any programs.
Rama Sudhakar, head of communications and marketing at Fairfield, declined to answer a number of specific questions about the University’s financial situation, but said the University has not cut any campus wide services, put on a faculty hiring freeze, or reduced the schools advertising budget.
‘The fact is that it is too soon to tell about where the economy is headed and how severe the impact will be,’ she said. ‘Until the financial markets and the economy stabilize, we are not in a position to draw reasonable conclusions or’ assess the effect on our financial situation.’
Dolan School of Business professor Winston Tellis said the University will be hurt by the failing economy through both alumni donations, and the ability for parents to pay their children’s tuitions.
‘As the economy worsens, more people lose their jobs, and some of those people will be the parents of our students,’ he said. ‘Also, the university’s generous donors might also be negatively affected, their investments are not returning dividends as in the past, and they may reduce their giving. That in turn affects some programs on campus (tuition pays for 60 percent approximate of the cost of education here), and while we may not have layoffs, we might have to defer some expenditures.’
Von Arx has ultimately declared the University safe for now, but warned that the University will not be in the financial clear for some time, and that it is every administrator’s obligation to closely monitor the situation.’
At this point, Fairfield’ has not been drastically affected since our strong enrollment’ is’ serving to’ meet our institutional goals and commitment,’ he said. ‘However, our endowment investments have reduced and could have a potential impact in the future. In these uncertain economic conditions, it is too early to draw any conclusions.’
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