Meredith Reynolds - Head Start College Blog

Archive for January, 2009

Endowments Are Down (and up?)
January 28th, 2009

Endowment funds are the savings accounts for colleges and universities and it appears they are going the way of individual’s savings accounts. As you consider long term viability of a college or university and perhaps financial aid opportunities, this might be an interesting issue to research. The excerpts below will give you some ideas of where to look for that information.
[Excerpts from an article entitled “Fortunes Falling” in January 27,2009 Inside Higher Ed.]
After a year of riding high, educational endowment investments began a downward spiral in the 2008 fiscal year, and the first half of 2009 was particularly brutal, according to two new reports released Tuesday.

In a joint survey, the Commonfund Institute and the National Association of College and University Business Officers found that college endowment returns dropped by 22.5 percent in the first six months of the 2009 fiscal year, which began July 1 at most institutions. Commonfund’s independent survey of the entire 2008 fiscal year showed losses of 2.7 percent, but the more up-to-date joint survey shows just how quickly things went from bad to worse.

“This is such an extraordinary fiscal year so far, hopefully not to get much worse, but we expect to see some further decline,” said John Griswold, executive director of Commonfund Institute.

Commonfund, which invests money for colleges, and NACUBO, a professional organization for college finance chiefs, have for years conducted annual independent studies of college endowments. The two groups had already planned to merge their surveys next year, but the decision to work together on a shorter-term project reflects a growing desire to examine the impact of the last few volatile months.

The joint survey included responses from 435 institutions, or about 55 percent of those asked to participate. NACUBO officials cautioned that responses constituted financial officers’ “rough estimates” of endowment performance, given the short time frame.

In a more comprehensive survey of the entire 2008 fiscal year, NACUBO and TIAA-CREF found the continuation of a long-term trend: The richest colleges performed best. Colleges with endowment assets of greater than $1 billion were the only colleges with positive investment returns — 0.6 percent – in 2008, the study found. Colleges with the smallest endowments, below $50 million, had the largest losses — 4.3 percent on average.

Even the wealthiest institutions, however, were unable to stave off double-digit investment losses in the first six months of the 2009 fiscal year. Colleges in every category saw average losses of more than 20 percent.

…for complete article go to Inside Higher Ed, January 27, 2008.

Save Money on Out of State Tuition
January 26th, 2009

Western Interstate Commission for Higher Education (WICHE)

Western Undergraduate Exchange (WUE)—Under this program, students pay 150% of in-state tuition in partnering states:  Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, and Wyoming.

This will be an increasingly important program as public universities in California shrink and demand grows. Using tuition numbers from US News Ultimate Guide to Colleges 2008, a California resident wishing to attend Washington State would owe $10,299 in out of state tuition. The student from New York attending Washington State would owe $17,180 in out of state tuition! Check it out!


“Need Sensitive” Admissions
January 25th, 2009

The economy has hit highly respected Beloit University hard. After laying off 30+ employees this small university knew it must cut admissions. And now as applications stream in for the coveted 340 positions in the freshman class administrators report that they will be using a “need-sensitive” admissions system in contrast to neighboring Lawrence University’s “need-blind”.  “Need-sensitive” admissions require applications be reviewed not only on ability to succeed academically, but also on ability to pay. In a perfect world I’m sure Beloit would select “need-blind” system–those academically able are accepted regardless of ability to pay.

The debate is whether it is better to admit students, not have adequate support and have them graduate with high debt or in essence force them to make a better economic choice by rejecting them. What do you think?

The lesson is different for different applicants. If you will need financial aid then you must research carefully colleges/universities that have need-blind admissions.  If you do not believe you will need financial aid when asked on the application so indicate and make sure you find a few “need-sensitive” schools to apply to. Whether all of this is right or wrong for society as a whole, it is what it is, at least for now.

Financial Aid–Gorilla in the Room When Picking Colleges
January 22nd, 2009

As reported in LA Times today the results for UCLA’s 43rd annual “American Freshman” survey are in. Surveyed were 240, 580 freshmen at 340 four-year colleges and universities. 43% of students viewed financial aid as very important or essential to their choice of a college. That figure was up from 39.7% last year and the highest in the 36 years the question has been asked. 8.5% of the students said their ultimate choice of college was strongly affected by not being offered financial aid by their first-choice campus, the highest such response since the question was first asked 24 years ago. (1984). Note the most recent deep recession was on and around 1991…so the current economy appears to be having a greater impact on post-secondary plans.

“The Sky Is Falling”…UC Irvine to accept 10 percent fewer at least.
January 15th, 2009

For those of you who still have the courage to read the papers, college admissions are hurting just as much as your home values. Wednesday the University of California Regents voted to trim freshmen enrollment (those who actually attend) by six (6) percent. Ouchhh! But wait it gets worse for those of you who were hoping to attend UC Irvine or UC San Diego where they will be reducing enrollment by twelve (12) percent because last year they had the misfortune at those two campuses of having more freshman accept their offer of admission than they had budgetted for. Well there’s always UC Riverside one might say…maybe not this year when they cut enrollment by ten (10) percent. Making lemonade out of lemons UC Merced plans to increase enrollment by seventeen (17) percent…always a silver lining.

What does this mean to the individual applicant’s chances of acceptance? Let’s take UC Irvine and work through the numbers. Applications are reported to be up 3% so UC Irvine has 43,712 applications. Given that last year they accepted 48.7% (20,685) and enrolled 23% (4,804),then they must lower to 19,685 those accepted in order to have 3,859 enroll. And it is my guess that the number accepted will be much less that 19,685 for fear the economy and rejections at other UC/Cal States will increase the number of students deciding to enroll at UC Irvine. Big Ouchh!

I hope this example illustrates how a cut in enrollment translates into cuts in acceptances…obviously you say. The problem then is that your son or daughter will have fewer acceptances and fewer choices..these kind of cuts put even more power in the hands of admissions officers who have such limited time to get to know the applicant. Again to save money, the UC’s and Cal States do not require teacher recommendations. The Cal States do not require essays. It’s all numbers.
Advice…diversify…spread the risk! If at all possible apply to private schools outside of California where there is not so much capacity pressure (midwest is looking really good these days) and if that is not possible and you are not happy with the choices you have do careful research into community college choices…but that’s for another blog.

Perhaps most important for the entire family, the Head Start College program paces students to complete their applications by Thanksgiving.


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