Frequently Asked Questions

Last updated March 2010.

How has the current improvement in the stock market over the first two quarters of the 2009/10 fiscal year changed Vassar’s financial situation?

The preliminary return on the College’s endowment was 14.5% for the first six months of the fiscal year (July 1 to December 31, 2009). The average return for the three-year period ending on Dec. 31, 2009 is 1.1%; for the five-year period ending on Dec. 31, 2009 the average is 6.4%; and for the ten-year period ending on Dec. 31, 2009 it is 5.1%.

Since the endowment lost roughly 24% of its value in 2008/09 (18% from investment losses and 6% for budgeted support of operations), the investment return earned in this fiscal year is applied to a much lower base. Thus it would take a much greater percentage return to restore the endowment to its starting value on June 30, 2008.

To illustrate this point, let us assume that the endowment was worth $100 on June 30, 2008, and then assume a loss of 24% in its value, reducing it to $76. We would need a 32% return on the $76 to bring the value back up to $100, assuming no additional endowment spending. Substituting actual values, we started the 2008/09 year with an endowment market value of approximately $850 million. The investment loss of 18% coupled with budgeted spending of 6% reduced the market value to about $646 million by June 30, 2009. The annual investment return on the $646 million June 40, 2009 market value would have to be about 40 % to cover endowment spending in this fiscal year and to return to the original level of $850 million. Therefore, the current estimated increase of 14.5%, although a very positive outcome, does not allow us to relax our efforts to reduce the operating expenses of the college, especially in light of the continuing uncertainty of the economic recovery.

What are the overall savings we have made in the budget since we began planning for reductions in 2008?

At the end of 2007, before the sharp fall in the capital markets, we projected operating expenses in 2010/11 of about $110.2 million in compensation; $46.4 million in non-compensation expense; and $11.8 million in equipment purchases and plant renewal projects around the campus. This budget projection would have required a $57.7 million draw on our financial assets, which represented 5.8% of their expected value. The budget we are proposing now for 2010/11 has $96.1 million in compensation; $43.5 million in non-compensation expense; and $6.8 million equipment purchases and plant renewal. This budget anticipates support of $45 million drawn from our financial assets. This level of endowment support is still well above a sustainable spending rate. We estimate that it will fall in the range of 6-6.5% of market value on June 30, 2010.

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 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.

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;
  • By the deadline for acceptance of the retirement incentives offered to staff, administration and faculty, 45 staff and administrators, 6 tenured faculty members and 4 non-tenure-track faculty members had accepted an incentive for full retirement. In addition 2 tenured faculty entered a phased retirement program. A little more than half of the administrative and staff positions vacated by these retirements will not be replaced.

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.

For more detail about the 2010/11 budget, see the “Planning” section of this site.

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.

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.
  • The reduction in number of faculty for 2010/11 will not result in an immediate reduction in the number of class sections offered. In fact, the number of class sections in 2010/11 is projected to be slightly larger than in 2009/10 for a number of reasons. The level of faculty leaves projected for 2010/11 is significantly below the 2009-10 level by approximately eight full-time positions, and the number of course releases granted for director, chair, committee, and administrative service has been reduced by approximately seven full-time positions. These factors result in a larger curriculum than we might have expected given the reduction in number of faculty and an average class size that will be approximately the same in 2010/11 as in 2009/10.

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.

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 $1.5 million to financial aid beyond the approved amount. As a result, anticipated financial aid expenditures for 2009/2010 are likely to be approximately $7.2 million higher than in 2008/09.

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.