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The Calhoun School

NY Private Schools Boom During Economic Slump

December 03, 2008 05:32 PM
by Jen O'Neill
As New York City private schools report that they are “thriving” during the economic downturn, parents and funders remain concerned that the prosperity will be short-lived.

Private Schools See Unexpected Increase in Admissions and Endowment

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“We’re not experiencing any signs of impact from the economic downturn,” Steve Nelson, head of school at Calhoun on Manhattan’s Upper West Side, told The New York Times. He clarified, saying, “That’s not to say that we won’t.”

Meanwhile, prominent New York City prep schools continue to defuse various rumors, including those saying there’s been a sudden increase in the number of families requesting financial aid, and others claiming that many students are shifting from private to public schools as parents become financially strapped. Contrary to these notions, Suellyn P. Scull, interim head of school at Trinity, explains, “This year’s admissions season has been perhaps busier than usual … to date we have had no reports of families planning to leave us.”

Nevertheless, the dwindling economy has hurt Trinity’s endowment, which fell from $50 million to $40 million over the summer.

Many schools use a formula for success that embraces “careful spending” and “committed fundraising.” In the event that a school’s endowment suffers, school activities are the first to take a hit.

Others remain less optimistic, including former trustee of the Dalton School, Lawrence Buttenwieser, who warns that private schools are going to eventually suffer. “There’s no way of escaping it,” he insists, “If it happens at Harvard, it will happen to everybody.”

Background: Ivy League schools work to combat financial slump

In early November, Harvard University—the country’s most well-endowed university—revealed they are preparing for a “period of greater financial restraint.” According to the school’s president, Drew Faust, Harvard might render its latest “expansion plan” as a calculated attempt to cut spending during economic trepidation.

On Dec. 3, the Associated Press reported that since the end of the last fiscal year, Harvard’s endowment has plummeted by $8 billion, an unprecedented 22 percent drop. The AP called it, “the school’s sharpest endowment drop in modern history.”

Harvard remains one of many “wealthy” higher education institutions tightening their budgets and cutting costs. According to Fox News, the school’s “efforts to address the economic downturn mirror what is happening elsewhere in the country, including other Ivy League schools.”

Moody’s is anticipating “a 30 percent decline in the value of college and university endowments in general in this fiscal year.” Fox News put this in terms of Harvard’s total endowment, summing up that “it would mean a drop of $11 billion.”

In the interim, the institution continues to seek out methods to help middle-class and low-income students; in fact, Harvard intends to help students of families who earn less than $60,000 per year attend for no cost.

Last month Faust sent an e-mail to students and parents suggesting that they remain concerned about the situation, but not worried: “We must recognize that Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered.”

Opinion & Analysis: Are rich schools needy schools?

“So how does an institution [like Amherst College] with an endowment that’s still well above $1 billion make a pitch that it’s needy, or at least equal in worth to other causes that lack any endowment, at a time like this?” asked The New York Times’ Rob Leiber upon visiting his alma mater to learn how schools are breaking through the financial hardships. Megan Morey, Amherst’s chief advancement officer, explained that asking for funding now is more “compelling” than it’s been in the past, and goes on to say, “The idea that some families might lose their homes but their kids won’t lose access to an Amherst education, that makes our case.”

The mission is clear for many schools, including Georgetown University. Vice president for advancement John M. Langley looks to Obama campaign tactics to inform the direction struggling colleges and universities should look toward: instead of “acting like institutions,” they need to be an entity people want to be a part of.
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