On Monday, December 1, 2008, the Dow Jones Industrial Average declined nearly eight percent, which was the 12th biggest single day drop and the fourth biggest point drop since the Dow was created in 1896. This does not bode well for the employment figures for November, which are due to be released this Friday.

It’s a trickle effect that has caused serious changes, possibly detrimental, to educational institutions across the country. Last Tuesday, November 25, President of the University and Professor of Philosophy and Religion Rebecca Chopp wrote her second message to the Colgate community on the university’s response to the poor economy.

In the letter, Chopp explains the serious challenges not only the campus community will face in the following year but also the nation. She outlined a four-step plan that provides ways in which the university will respond.

“Our first action will be to substantially reduce next year’s operating budget allocation to capital projects,” Chopp stated in her first listed measure. The university has one project in mind, the remodel of Lathrop Hall, which will be put on hold until further notice. Sidelines, a consulting firm in charge of advising campus administration, will discuss which projects can wait renovation within the next year.

“Sightlines did an analysis of the physical facilities on campus, and said we were structurally in good shape,” Chopp said. “We take the conditions of our facilities seriously, for our buildings to be both cosmetically and structurally good. The Sightlines report gave us confidence that instead of saying, for example, ‘replace the roof because it is 2009 we can wait a year provided the condition of the roof is still in good shape. We will go through our projects with more detail and have our building and grounds staff study them and say, ‘Does this really need repair?”

One way to look at the economic situation is to see it as making the university more efficient. Rather than spending money on unnecessary repairs and academic budgets, the school will make sure all the money spent on capital projects and operating budgets makes sense.

Chopp will ask “all deans and vice presidents to identify 5 percent savings in their operating budgets for 2009-10.” This includes admissions, athletics and academics. And if each department can cut more than five percent with out affecting crucial aspects of the department, Chopp says all the better.

“We have had the luxury of expanding our budgets and programs in the last 5 or 6 years due to our investment returns and the generosity of donors and have seen a tremendous growth in momentum in programs,” Chopp said. “This crisis gives us the opportunity to consider efficiencies and even access programming and ask ourselves questions such as, ‘Do we need to have two lectures on the same topic within a semester?” Therefore, the faculty will have the opportunity to weed out unnecessary spending.

The current economic situation will affect all academic institutions whether public or private. Chopp worries greatly that many establishments will fail to rise in the light of the recession. Especially New York State public schools, which Chopp says will most likely have a mid-year tuition increase while also cutting immense dollars out of its budget. Public universities will be forced to expand class size and cut faculty and programs. Chopp believes that it will make more sense for prospective students to choose a private school like Colgate because although tuition is higher, the amount of financial aid offered and the low student faculty ratio will serve greater benefits in the long run.

There have been no decisions made yet on whether or not tuition will rise in the next year.

“We are well aware it will be difficult to increase tuition at the rates we have in recent years,” Chopp said. “But we are concerned about the pressure of costs such as government and other regulations which continue to result in cost pressures and budgetary items from fuel and energy costs to personnel costs such as health care which we have little control over.”

It is uncertain whether the number of undergraduates in need of financial aid will increase, but Colgate will be ready to tackle the issue when it arises next semester.

“We really won’t know. Tuition bills go out in December. So probably in January we will have a better sense of the needs of our current students. We have a plan to increase financial aid over the next three years,” Chopp said.

Chopp assures that the financial situation does not have the potential to change the makeup of the student body, in the sense that less qualified students who can pay full tuition will be admitted over more qualified students in need of aid.

“Unless we go into a long term recession,” she said. “I’m talking about 5 to 10 years. I don’t expect the top tier of higher education to be dramatically hurt. I worry a great deal about the rest of our liberal arts schools below the top tier for these schools have lower endowments, less capacity for fund raising, and smaller application pools. There, I think, the budgetary pressures will be enormous. That’s what most of the experts are saying. Schools like Colgate, Middlebury, Duke, and Princeton will be fine. We’ll have to tighten our belts and even make some structural changes perhaps, but we will be fine.”

Chopp has gathered ideas from other universities. She believes that because the recession has affected even the top tier private schools, gathering information will only help the university to make the best decisions for its students and faculty.

“We’ve gathered ideas from every school we can,” Chopp said. “We are very much keeping track of letters written by other liberal arts schools such as Middlebury, Williams, Carleton, Wesleyan, and Hamilton, but we are also looking at ideas from big schools like Boston College, Emory, Northwestern, Harvard, and Duke.”

There has not been a strong outcry from students on the current financial state, but Student Government Association (SGA) president senior Dave Kusnetz and SGA vice president senior Melissa Madaio are fully aware of how a decrease in funding will affect the university. Over the past semester, Kusnetz and Madaio have attended meetings concerning Colgate’s budget and campus planning.

“It is important for students to understand that budgets for discretionary spending are being slashed, so there will be less money for administrators to fund student projects,” Kusnetz said. The free distribution of The New York Times, in particular, may be sacrificed according to Kusnetz. This came directly from SGA’s pooling money and individual budgets.

“These difficult times will force every student to use creative means to raise funds for their projects,” Kusnetz said. “Inspiring creativity and innovation is perhaps the only silver lining in a financial crisis.”

Chopp will continue to update the Colgate community with decisions made regarding the financial crisis. She will also address the issue in the upcoming Colgate Scene.