Over on NPR's excellent blog Planet Money, Caitlin Kenney writes that public universities all over the country are struggling to find ways to cut their costs in the face of the economic downturn:
Universities around the country are bracing for massive cuts as states rethink their shrinking budgets. In preparation for expected budget cuts, many are asking their staffs to look for any way to save money. School officials say cutting a university budget is complicated by factors like tenure, which make it harder to lay people off.
The same problems apply here at Princeton University and at the other Ivies-- per The Wall Street Journal:
Princeton said its endowment supports 45% of its roughly $1.25 billion budget -- far more than most universities, making budget cuts necessary. Dr. Tilghman said the best-compensated employees would have their raises capped at $2,000 and administrative budgets would be reduced by 5%. Princeton said it would scrutinize all new hiring, including new faculty searches and defer new capital projects to save more than $300 million over 10 years.
And it appears the worst is yet to come, with the Journal reporting that "none of the schools gave data on performance to date of their holdings of more exotic and illiquid investments, such as real estate, commodities and private equities. The expected losses in those categories have led to the bigger, full-year loss estimates."
Question of the day: when will universities make the pilgrimage to Capitol Hill to request a bailout?
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