Frequently Asked Questions

  1. Has Vassar’s financial aid budget grown in recent years?
  2. How is the college’s compensation budget distributed among faculty, administration, and staff?
  3. Why can’t the college simply raise more money in order to close the budget gap?
  4. What is the difference between restricted and unrestricted endowment and what proportion of the endowment does each category constitute?
  5. How were the major capital projects that were in progress over the summer funded?
  6. How large is the budget gap caused by the financial crisis and the economic recession in 2008 and early 2009?
  7. What steps has the college already taken to respond to the financial crisis?
  8. Has the college taken sufficient steps to bring the budget into equilibrium?
  9. What values guide Vassar’s planning to restore financial equilibrium?
  10. How is the planning for changes being carried out?
  11. What measures is the college taking to achieve necessary savings in the 2010/11 budget, to be approved by the Board of Trustees in February 2010?
  12. What is the timeline for these additional measures?
  13. Can we wait to see how the financial situation changes in the next couple of years and allow natural attrition to bring us the savings we need?
  14. What happens to our plans if the economy improves in the next 12 months?
  15. What are the implications of the financial situation on our commitment to being need-blind in the admissions process?
  16. Will reductions in the faculty affect the curriculum?
  17. When will we move forward with the new science building?
  18. Can the college increase revenue from other sources like summer programs?
  19. Can the college add more students to increase revenue?

Has Vassar’s financial aid budget grown in recent years?

As part of its commitment to fostering a diverse community of learners and teachers, Vassar has steadily increased its financial aid spending over the past 10 years, from a budget of $17.4 million in 1999/2000 to $36.6 million in 2008/09. During this time, the average financial aid package for freshmen has grown steadily as well, with the average Vassar grant rising from $14,825 (48% of the 1999/2000 comprehensive fee of $30,800) for the entering class of 2003 to $30,209 (61% of the 2008/09 comprehensive fee of $49,250) for the class of 2012. The percentage of entering freshmen on financial aid has increased significantly beginning with the class of 2010, rising from 45.8 % to 52.6% (class of 2011) to 55.9% (class of 2012) to a projected 60.0% (class of 2013).

In the college’s 2009/10 budget, $44.48 million was approved for financial aid. Due to a somewhat higher-than-anticipated need among the class of 2013 as well as increased need among continuing students whose family incomes have changed as a result of the recession, the college has, as of September 2009, allocated an additional $900,000 to financial aid beyond the approved amount. As a result, anticipated financial aid expenditures for 2009/2010 are likely to be approximately $7 million higher than in 2008/09.

How is the college’s compensation budget distributed among faculty, administration, and staff?

In the 2008/09 budget the compensation line of the budget was $75 million dollars. Of that amount $19.8 million went to administrative salaries, $31.6 to faculty salaries, $20.9 to staff, and $2.7 to student wages.

Why can’t the college simply raise more money in order to close the budget gap?

The financial model that we use to understand the current budget gap already includes the anticipated results of an aggressive fundraising effort in its revenue projections. To close the budget gap through fundraising would require setting additional goals at a level that is unrealistic.

During the 2008/09 fiscal year the college raised more than $44.2 million in new gifts and pledges – the second strongest year in Vassar’s history. This represented an impressive vote of confidence by Vassar alumnae/i, parents and friends in the college, its core values, its priorities and its leadership. As already noted, these positive results in fund raising have already been factored into the college’s financial planning. Of the total, $16.1 million came in the form of pledges, which will be paid into the college over a period of three to five years. Pledges such as these are vital to the college’s financial health precisely because their multiyear nature allows for advance budgetary planning. In addition, $19.7 million of the gifts received in 2008/09 were made for restricted purposes, as stipulated by the donor, for important projects reflecting the college’s priorities such as financial aid and the science project. By law, these restricted gifts cannot be redirected to other purposes.

As these figures indicate – and as happens during any given fiscal year – only a portion of the funds raised during 2008/09 were in the form of cash gifts for unrestricted purposes. Approximately $8.4 million in unrestricted gifts were received, for the Annual Fund, which is unrestricted and provides support directly into the operating budget. The financial model had projected $9.1 million for the Annual Fund in 2008/09.

What is the difference between restricted and unrestricted endowment and what proportion of the endowment does each category constitute?

In the simplest terms, restricted endowment funds are given by donors for a particular purpose (such as financial aid to students, library book acquisitions, lectureships, or endowed faculty positions) and the money in that fund can only be used to further that purpose. Unrestricted funds are given to the college to further its mission, but the college has the freedom to determine what priorities these funds will support. Of the total endowment, about 68% is in restricted funds, and 32% in unrestricted.

How were the major capital projects that were in progress over the summer funded?

There were three major renovation projects underway this summer: the completion of Davison House renovations and the Art Library reading room restoration; the beginning of theWimpfheimer nursery school renovation. All three projects had been in the planning stage for several years, with specific sources of funding determined before the economic downturn. The Davison project was funded by tax-exempt bondsthat the college issued in 2007 to finance the most urgent campus renewal projects, and Davison was the last of the projects funded by this bond issue. The Art Library renovation was funded by the Deknatel endowment fund, established by an alumna who restricted the use of her gift to projects that focused on the Frances Lehman Loeb Art Center, the Art Library, and the Art Department. The renovation of the Wimpfheimer nursery school was also a restricted gift given specifically for the purpose of this renovation. The renovation will be fully funded by the gift.

The Board also approved a reduced allocation of $4.9 million for basic campus renewal projects in 2009/10. Those funds were targeted to the highest needs, such as steam line repair and replacement and masonry and roof repairs at Josselyn House – the two largest projects undertaken this past summer. It is estimated that a campus of Vassar’s size, age, and complexity should budget more than $10 million annually for campus renewal projects. The current financial crisis has required us to reduce that budget for the time being.

How large is the budget gap caused by the financial crisis and the economic recession in 2008 and early 2009?

One way of defining the budget gap is to calculate the amount used from the endowment to cover annual operating expenses as a percentage of the market value of the endowment and compare it to a percentage (from 4.5% - 5.5%) of use that is sustainable over a long period and maintains the strength of the endowment for future use.

Using that measure, for the 2009/10 budget, the budgeted use of the endowment is $50.6 million, or 7.6% of the market value of the endowment ($660 million) on June 30, 2009. A sustainable use of 5.5% would be $36.3 million. So the gap for the 2009/10 year is $14.3 million.

In comparison with the use of the endowment in 2009/10, it is also useful to look at the most recent previous years in which the endowment was close to this $660 million market value to see what spending was used from the endowment in support of operating expenses in those years. On June 30, 2005, the endowment’s value was $672 million, and we drew $38.4 million (5.7%) to support the 2005/06 operating budget. On June 30, 2001, the market value of the endowment was about $675 million, and we drew $29.3 million (4.3%) to support the 2001/02 operating budget.

To understand how the budget gap widens over time, we use a forecast model that projects growth in expenditures and revenue into the future. Before the capital markets fell in 2008 and early 2009, the College forecast that the endowment would grow to $1.1 billion by June 30, 2012. However, the projected reliance upon the endowment to support the operating budget was still too high at about 6% of market value. Therefore, before the financial crisis, we were already planning steps to reduce expenditures to close this small gap.

Operating expenses would have risen to about $187 million by 2012/13, based on the plans made before the financial crisis. If we project the value of the endowment in 2012 to include the losses in the endowment’s value due to the financial crisis without any projected changes in expenditure, the use of the endowment to support our operating expenses would rise to more than 10%, which is clearly unsustainable. To achieve a sustainable level of endowment support in the future, we are identifying budget changes that can reduce the future operating to about $150 million by 2012/13. So without action, there would be a widening budget gap of about $37 million by 2012/13.

What steps has the college already taken to respond to the financial crisis?

The measures the college has taken so far have allowed a reduction of $500K in the 2009/10 budget in comparison with the budget for 2008/09. In comparison with the operating expenses we projected for 2009/10 prior to the economic downturn, the approved budget is $6.8 million lower. To accomplish these significant savings the college took the following steps:

  • a salary freeze in 2009/10 for administrators earning more than $50,000 and for tenured faculty;
  • a hiring freeze for many faculty, administrative, and staff positions and a small number of lay-offs, resulting in a reduction in non-faculty positions of 25 FTE and in faculty of 16 FTE in 2009/10;
  • a reduction in overtime for hourly employees;
  • a reduction in departmental operating budgets for 2009/10 averaging 10%;
  • elimination of non-essential travel;
  • a decrease in spending on facility renewal and discretionary capital projects;
  • the provision of incentives for voluntary retirements: as of August 15, 44 non-faculty employees had chosen to retire under these incentive plans. As of August 15, about a dozen faculty members had spoken to the dean of the faculty about their interest in either the full retirement or the phased-retirement incentives.

Other changes include efforts to reduce energy consumption, reductions in student employment, and measures taken in various offices on campus to adapt to reduced staffing levels.

Has the college taken sufficient steps to bring the budget into equilibrium?

While we have made significant progress, these steps, in and of themselves, will not bring our budget into equilibrium. There are three significant reasons why the college must continue to develop measures to control our spending.

The steps taken so far have reduced our use of the endowment to support the 2009/10 budget to 7.6%. To achieve financial equilibrium, the draw on financial assets should be reduced to between 4.5% and 5.5% of beginning market value. The Priorities and Planning Committee and the Trustee Budget and Finance Committee have concluded from the evidence of the financial model that it is highly unlikely that the endowment will regain sufficient value in the next three to five years to make further cuts unnecessary, even assuming the most optimistic national and global economic forecasts.

Second, the short-term reduction in funding for plant renewal and renovation that allowed us to reach our goal for the 2009/10 budget has increased the current backlog of deferred maintenance. In the current planning for the 2010/11 budget the funding for plant renewal does not increase significantly. We will need to restore that funding as soon as possible and actually increase it in the years ahead in order to address the backlog of needed capital renewal projects and to provide funding for renovations that serve the needs of the educational program.

Finally, our vision for Vassar’s future includes ensuring that we continue to have the necessary resources to bring the best possible students to the college. Current economic forecasts indicate that family incomes will still be under pressure for many years, with employment rates lagging behind other signs of economic recovery. This means that it is likely there will be pressure on Vassar’s financial aid budget for some time.

What values guide Vassar’s planning to restore financial equilibrium?

We are committed to preserving the distinctive educational experience of our students and fulfilling the mission of the college. Central to that mission are:

  • a faculty that is committed to excellent teaching, intellectually demanding research, and stimulating artistic work, as well as to the interdependence of these activities;
  • student interactions with faculty in small classes as well as lectures, individual meetings, and shared research;
  • an engaged and talented student body;
  • a diverse community of learners and teachers who bring a variety of experiences, opinions, and commitments to their exchanges with each other;
  • a well-balanced curriculum;
  • the facilities and support needed to enable students and faculty to achieve their educational goals;
  • an environment of respect and consideration for the members of this community.

A robust financial aid budget and a level of compensation that encourages talented employees to stay at the college are essential elements in achieving these goals.

The college is attempting to create a process for enacting change in response to the financial situation that is transparent, consultative and deliberate.

How is the planning for changes being carried out?

The planning is the responsibility of a number of committees, individuals, and working groups, all of whom depend on discussion with and input from different constituencies within the larger college community.

  • In the fall of 2008 the president asked the community as a whole for suggestions for savings. These suggestions, provided by emails, letters, and comments at meetings, have contributed to ongoing discussions and decisions about necessary changes.
  • The Priorities and Planning Committee considers the overall financial picture and proposed changes in different areas in the light of the college’s mission and stated priorities.
  • The Faculty Compensation Committee works with the dean of the faculty, the dean of planning and academic affairs, and the vice president for finance and administration to assess and recommend increases in compensation for the faculty. Its work is guided in part by data comparing Vassar’s compensation with our peer schools. Those data are provided by the director of institutional research.
  • The Benefits Committee, a joint faculty/administration group, is responsible for recommendations to the president concerning changes to faculty’s and administrators’ benefits. They consult with the Faculty Compensation Committee as they develop these recommendations, and there will be meetings over the course of the 2009/10 year to provide opportunities for faculty and administrators to enter the discussion.
  • The Advisory Group on the Allocation of Faculty Resources (AGAFR), which was convened and met regularly in spring 2009, will meet weekly throughout the fall and spring to consider the changes in faculty staffing. Their work is coordinated with the Benefits Committee, the Faculty Compensation Committee, and the Committee on Curricular Policies. They will hold meetings with various faculty constituencies during the 2009/10 academic year, as they did in 2008/9.
  • Every senior officer is working with directors and office/department heads in their areas to consider how current operations can be made more efficient, while still ensuring the level and quality of service necessary at Vassar. These changes are frequently informed by suggestions from members of the community sent to The senior officers meet regularly with each other to see how plans in one area may affect other areas and adjust planning accordingly.
  • The Vassar Student Association executive board meets regularly with senior officers and the president to discuss changes that affect the student body. The president and senior officers also meet with the VSA Council and hold open meetings for the entire student body.
  • Faculty meetings are held monthly during the academic year, and, in addition to the regular business of the faculty as outlined in the Governance, have become a forum for discussion about the financial planning process and the development of responses to the economic and financial crisis. In addition, Administrative and Staff Forums, as well as meetings with administrators and staff in particular areas of college operations, have become opportunities to present and discuss the financial plans of the college.
  • The Board of Trustees, acting through the Budget and Finance Committee, reviews the administration’s budget proposal and longer-term financial plans. The Board and the Budget and Finance Committee in particular were very active over the past year, holding special sessions to review the unfolding impact of the financial and economic crisis. The Board expects to review updates on the multi-year financial plan at Board meetings in October and February.
  • In May of 2009, members of the Board of Trustees held an open meeting for members of the community to discuss Vassar’s response to the economic and financial crisis. Because most students had left campus before the May Board meeting, the trustees will hold another open meeting this fall.

What measures is the college taking to achieve necessary savings in the 2010/11 budget, to be approved by the Board of Trustees in February 2010?

The plans to reduce spending in order to achieve a budget for 2010/11 that brings us closer to a sustainable endowment draw include the following:

  • We have instituted retirement incentives for staff, administrators, and faculty. Through restructuring and identifying work that can be streamlined, automated, or even eliminated, we are planning for minimal replacement of voluntary retirements.
  • We have been working since February 2009 on ways to reduce the faculty and non-faculty salary budget by about 13 faculty positions and 60 non-faculty positions, including positions vacated by retirements or resignations that do not need to be filled.
  • We will continue to review all positions that become vacant and only fill those that are deemed necessary; we will try to fill those positions from current staff, creating vacancies elsewhere that may not need to be filled; and there will be a number of positions that are currently filled that will be eliminated.
  • Senior officers, directors, office and department heads are restructuring or eliminating work in areas where the levels of staffing have been reduced to prevent overburdening staff.
  • The dean of the faculty and the Advisory Group for the Allocation of Faculty Resources (AGAFR) are considering changes in release time, in leave policies and replacements, and in the level of contributions made to the curriculum by non-tenure-track faculty.
  • Current plans for years after 2009/10 are based on the assumption that salaries for faculty and administration will increase modestly over the next few years.
  • The Benefits Committee, the Faculty Compensation Committee and the Priorities and Planning Committee are considering changes in our benefits policies.
  • Operating budgets will be held flat or reduced further, wherever possible.
  • Capital projects will be limited to those that are necessary for the safety and urgent repair of campus facilities. In the financial model, support for campus renewal has been reduced to about $3 million per year. We expect to need supplemental funding from a small bond issue in order to meet urgent needs sometime in the next year or two.

What is the timeline for these additional measures?

Our goal is to return the college’s operating finances to a position closer to financial equilibrium by 2012/13. This will require continued attention to operating and personnel budgets. We are attempting to plan for a range of possible economic conditions, given the uncertainty about the pace of recovery in the capital markets and the duration of the recession in the US.

The college anticipates that it will be in a position to announce staffing changes necessary to achieve the 2010/11 budget objectives in the fall of 2009. Any Benefits Committee recommendations for changes in benefits will be discussed over the course of the 2009/10 academic year. Some changes may be included in the 2010/11 budget, with others taking a longer time to discuss and implement. Other decisions about the 2010/11 budget, such as salary increases and departmental operating budgets, will take place during the fall of 2009 in preparation for the 2010/11 budget, which will be presented to the Trustees in February 2010.

Updates to the website will provide further information about these changes, as it becomes available.

Can we wait to see how the financial situation changes in the next couple of years and allow natural attrition to bring us the savings we need?

There is no reasonable scenario for recovery of the capital markets that would eliminate the need for budget adjustments and the kind of budget restructuring that the college is undertaking. The rate of spending from the endowment, if we just waited for the economy and the financial markets to recover, would be so high that it would deprive future generations of Vassar students of the benefit of endowed funds intended for their support. In the short term the strength of the institution will be measured by its ability to respond responsibly to this financial challenge with careful planning that is based on the values of the institution.

The Board of Trustees has a particular responsibility to ensure that the value of the endowment is protected to benefit Vassar today and in years ahead. The Board is fulfilling this responsibility by requesting a budget plan that reduces the reliance on an unsustainable draw from the endowment.

What happens to our plans if the economy improves in the next 12 months?

In the financial model that we use for planning purposes we can test the effects of different investment returns on the budget gap. Even in a best-case scenario--a loss of 20% in 2008/09 and an immediate recovery in 2009/10 to an 8.5% return (which was until recently our expectation for the average annual return on the endowment), the reductions we are planning would only return us to a sustainable draw on the endowment by about 2011/12.

Second, our modeling for budget reductions through 2012/13 is a bare-bones budget that does not include any new initiatives. It excludes, for example, the construction of the science center as well as many other projects, already being planned that will enhance the education we offer our students. Vassar remains deeply committed to such projects. Controlling our expenditures now will not only bring us closer to financial equilibrium but will also allow us, should the market recover more rapidly than expected, to allocate resources more quickly to projects that have been put on hold as we react to the economic downturn.

Third, our modeling includes reductions in the annual allocation for renewal of the college’s physical plant. Established guidelines suggest that an appropriate rate of plant renewal expenditure would be an annual budget allocation of approximately 1.5% of the value of the plant. For the next three years, we are only allocating funds sufficient to cover basic safety and maintenance concerns, significantly less than the recommended 1.5%. We will need to catch up on our spending on the physical plant in the coming years.

What are the implications of the financial situation on our commitment to being need-blind in the admissions process?

Need-blind admissions is closely tied to one of our primary educational goals of attracting the best students in the country to Vassar regardless of their family incomes. The Class of 2013 is more socioeconomically diverse than any class in Vassar’s history, with 60% of the class on financial aid.

Because of our commitment to the values the policy represents, we will continue to be need-blind, unless the reductions in the operating budget necessary to accommodate continued growth in financial aid, coupled with losses in the endowment, ultimately threaten other core values of the institution. At that point, the college and the Board of Trustees would have to weigh the consequences and establish priorities among competing demands on college resources.

Will reductions in the faculty affect the curriculum?

Both the Advisory Group on the Allocation of Faculty Resources and the Committee on Curricular Policies are considering how to reduce the number of faculty in ways that preserve the richest possible curriculum. Both groups view the availability of small classes as an important feature of a Vassar education.

Class size

In the 2007/08 academic year the average class size at Vassar was 16.4 students and in 2008/09 it was 16.0 students. Our current best estimate indicates that we will offer approximately 60 fewer class sections in 2009/10 than in 2008/09. This reduction in sections will increase the average class size to approximately 16.8 assuming the total enrollment remains approximately constant and that students enroll in the same number of classes.

Current plans for reducing the size of the faculty in 2010/11 could reduce the number of class sections by an additional 70 at most, which would increase the average class size by approximately one additional student. It is likely, however, that the size of the curriculum will shrink by fewer than 70 sections in 2010/11 because of reductions in release time.

Student/faculty ratio

In our group of 21 peer schools in 2008/09, one school calculated its student/faculty ratio at 7 to 1, six (including Vassar) at 8 to 1, seven at 9 to 1, and seven at 10 to 1.

With the reductions planned for 2009/10 and 2010/11 the student/faculty ratio will be about 9 to 1.

These data indicate that we should continue to be able to offer relatively small classes in which individualized attention to student learning remains an important element. We will return to average class sizes comparable to those we saw in the early years of this decade.

Breadth of choice

A reduction of 70 class sections or fewer, out of about 1200, will diminish students’ course choices slightly. We will continue to make sure that the curriculum retains the core aspects of each discipline, or, in the case of programs, essential elements of multi-disciplinary study.

The Committee on Curricular Policies, the registrar, and the dean of the faculty will ensure the availability of adequate seats in introductory courses, in first-year courses, and in areas of the curriculum where there is particular enrollment pressure.

We are also considering ways of scheduling courses in order to maximize student choice by reducing conflicts in meeting time.

Furthermore, departments are being asked to consider the possibility of using courses in other departments as a component of the major as a means of economizing as well as sustaining the multi-disciplinary connections within our curriculum.

When will we move forward with the new science building?

It is crucial to continue the planning for the new building and to keep our sights on this improvement to the educational experience of our students, which so many faculty and administrators have been planning for over the past 7 years. Science is an integral part of a liberal arts education and a crucial component in preparing students to contribute to serious world-wide needs after they graduate. As the sciences have evolved in increasingly interdisciplinary directions in recent years, we recognize that our current facilities, which divide departments up by building and spread them across campus, are making the kinds of collaborative teaching and research that are the hallmark of contemporary scientific work increasingly difficult.

The new science building will contribute significantly to the college’s efforts to attract talented students and faculty to the college and remains a top priority in the college’s strategic plan. Efforts are underway to raise funds from donors and other sources to allow for construction to begin as soon as the funding is available. Though the current financial situation may require us to start work on the building later than we had initially planned, the project remains a top priority.

Can the college increase revenue from other sources like summer programs?

There are at least three reasons why we cannot count on the expansion of summer programs to provide significantly more revenue to the college.

First, summer programs do not generate large amounts of revenue once instructional and campus support staffing costs and wear-and-tear on the facilities are factored in.

Second, the “downtime” provided by having fewer people on campus in the summer provides an important window for various maintenance and construction projects to take place. While we anticipate a slow-down in capital projects over the next few years, many of those that will take place during the summer are less disruptive when the campus population is smaller.

Third, the economic downturn is itself contributing to a contraction in the demand for summer programs. Some programs did not return to Vassar this past summer; some shortened their duration; and some saw smaller enrollments. It is not clear that, even if we were in a position to expand such offerings, there would be adequate demand to increase campus revenues.

Can the college add more students to increase revenue?

It may prove beneficial in the long term to adjust the size of the student body. This would be a decision that the college would make after careful study of the financial and educational effects of such a change. Adding students as needed to balance the budget does not allow us to plan for growth in a strategic way. And of course, since we are need-blind, we cannot completely predict precisely the amount of revenue we would achieve should we expand future classes.