Cornell University, the economic crisis’s latest victim in higher education, will freeze hiring, pause construction and review its budget, Cornell said Thursday.
Effective today, Cornell is suspending hiring from outside the university, except faculty, through March 31, 2009. All construction projects that are not already in progress will be put on hold for 90 days. And for the next 45 days, Cornell will evaluate its budget to control costs and reduce financial exposure.
“While we cannot be certain about the dimensions, depth and duration of the difficulty, we are confident Cornell is in a good position to adjust operations and budget to address a loss in revenue in the wake of the financial crisis, relying on the institutional expertise and commitment of faculty, staff, alumni, students and friends,” Cornell’s president, David Skorton, said in a statement Friday.
Cornell is reacting to the expectation of budget cuts from New York State, a decline in the school’s $6 billion endowment, and fewer donations, Skorton told Bloomberg News.
The announcement follows distress signals across higher education as endowments shrink, tuition becomes harder to afford and student loans become harder to find.
In October, Boston University said it would freeze non-critical hires in anticipation of rising demand for financial aid. The University of Georgia in Athens also announced a hiring freeze, reduced hours and downsized library subscriptions after the state cut its budget by $30 million.
Colby College in Maine has lost 25 percent of its endowment, which peaked at $630 million. Swarthmore College’s $1.4 billion endowment fell 15 percent to under $1.2 billion, and Rutgers’ $548 million fund declined 20 percent. The endowment of University of Texas at Austin declined almost $1 billion.
The median return among 165 large institutional funds tracked by the Trust Universe Comparison Service for the fiscal year ending in June was a 4.4 percent decline. Across the Ivy League, the University of Pennsylvania’s endowment slid 3.9 percent last year, and Princeton University’s fund has shrunk by an undisclosed amount since June, when it posted a 5.6 percent return.
Yale, whose $22.9 billion endowment grew 4.5 percent in the fiscal year ending in June, is more insulated from market fluctuations and can afford to absorb some short-term losses, corporate law professor Jonathan Macey said.