To: The St. Lawrence Community
From: President Daniel F. Sullivan
Date: February 28, 2009
Subject: Brief Report from the Weekend’s Board Meeting
As you can imagine, this past weekend’s meeting of the St. Lawrence Board of Trustees had as its major preoccupation how we will move forward through the most challenging world economic mess in three-quarters of a century to continue to provide the kind of undergraduate education our students and their families expect of us with less overall revenue than we had planned. As I will explain below we have succeeded in closing our budget gap for next year while still being able to fund expansion of some critically important educational priorities. We cannot do so without raising tuition, room and board. Tuition will go up 4.9% to $39,520 and room and board by 5.3% to $10,160. Our budget for St. Lawrence-funded grants and scholarships will increase by 8.2% and we plan to continue to respond to students’ and families’ needs on a case by case basis, as we always have.
So here is our situation. St. Lawrence is financed primarily from three revenue sources: student tuition, room and board charges, and a student activity fee; income from our endowment; and income from the generous gifts of individuals and foundations. As of this writing our endowment has lost 25% of its value since June 30, 2008, and because of the economic stresses our donors are feeling we are anticipating that gifts in support of current operations will decline for next year as they have for this year. In combination this is a $3-4 million revenue loss problem for us—significant indeed but thankfully a far smaller problem to solve, at least in the short run, than the problems wealthier colleges and universities must solve to handle the same percentage declines on much larger endowment and gift bases. While next year’s budget is the one we must resolve now, we must also be mindful of the potential impact of a long recession that may become worse before it becomes better.
Working steadily at this since October we have found ways to close this gap through a combination of revenue improvements and budget-tightening measures that we believe will not negatively affect students’ experiences while we continue to move forward with several of our most critical priorities for enhancing our students’ education here. Our faculty and staff are our most important resource for our work. Our solution moves ahead with our plan to improve faculty and staff compensation. We have also provided for a capital budget for next year that continues to address at a reasonable level pressing facilities, technology, equipment and library needs. This is the plan:
Revenue: We have been greatly pleased at continued increases in student retention: 97.8% of the first-year class returned for the second semester—the largest percentage since at least 1990—and overall about 40 more students returned for spring semester this year than we had forecast. This affects our enrollment estimate for next year positively as well. In addition, before learning of this increased enrollment, we had decided in the fall that a top priority is to eliminate overcrowding in our residence halls due to unexpectedly high percentages of accepted students enrolling and unexpectedly high levels of retention last year. We have done this by opening up some high quality faculty and staff housing to students, acquiring additional residential spaces near campus, and freeing up other high quality rooms by fitting better the sizes of student groups living together to the sizes of the facilities in which they will be housed. We were unhappy that we had to house some first-year students in lounges this year—they were unhappy too—and we were determined to avoid that next year. The result is more students living in more appropriate St. Lawrence residential spaces and therefore more revenue.
Expenses: We will reduce earlier planned expenses by $3 million for next year by: recognizing lower rates for energy and improving energy conservation—$800,000; managing faculty sabbatical and leave replacement more tightly—$400,000; imposing a minimum delay in the filling of all administrative positions of 90 days and beginning a program of voluntary reductions in annual appointment length for administrators—$400,000; reductions in entertainment expenses and travel costs, primarily through less expensive travel—$400,000; a combination of many other small expense reductions totaling $1 million.
Among priorities on which we will continue to move ahead the most important, from my point of view, is our planned expansion of opportunities for students to study abroad. Our goal over the next 3-5 years is to have 65% of our students study abroad for at least a semester, up from around 50% today. A new program in Thailand will begin this coming fall, as will a program in New Zealand and an additional program in Italy. We are piloting other new opportunities, including faculty-led programs in developing countries. We know that study abroad is one of the most transforming experiences our students can have. It is hard to imagine an education that adequately prepares students for the world we face today that does not include robust opportunities for such study. A second priority in which we will be able to invest more resources next year as a result of many new gifts is student/faculty research, including creative work in the arts, through our University Fellows Program. These are absolutely wonderful opportunities for our students.
I note also here that we continue to experience very high demand for a St. Lawrence education. You will recall that applications to St. Lawrence rose 45% two years ago and an additional 17% last year to an all-time high of 5,418. This year’s total, not quite complete, will exceed our total of two years ago (4,646) by perhaps 100 applications. Our 241 Early Decision applications for this year were just slightly lower than last year’s 249. We anticipate a wonderful, strong new first-year class in the fall!
These are difficult times, to be sure, and they may get even more difficult. I believe we have found a good balance in our approach to dealing with our economic uncertainties—one that absolutely focuses first and foremost on the education of our students, our reason for being!
