Like colleges across the country, McDaniel is feeling the effects of the economic recession. Fortunately, McDaniel students will likely be shielded from the full force of these effects.
The economic recession has left its mark on McDaniel. The college’s endowment declined about 25 percent, state funding was cut twice this year, and donors are more cautious about giving, according to Dr. Ethan Seidel, vice president for Administration and Finance. At the same time, students need more financial aid, so the college spent $1.2 million over budget this year, according to a letter from President Coley to the McDaniel community in December 2008. Despite economic challenges, McDaniel remains committed to staying affordable for students.
“The college is wholly committed to providing the financial aid needed to help attract students and to keep our students here. The college has cut costs in all areas, except financial aid,” says Patricia Williams, director of Financial Aid. Currently, 80 percent of students receive some form of financial aid, according to Williams.
Seidel confirms the college’s commitment to providing students with financial aid. With more students likely to face financial challenges in the coming academic year, Seidel says that financial aid is a “certainty.” He says that maintaining financial aid is a top priority of the college, and he assures that there will be an increase in financial aid next year.
“One thing we are staying committed to is staying affordable?. I think if anything is maintained, it is going to be financial aid, absolutely,” Seidel says.
Along with an increase in financial aid, the college is also attempting to avoid a spike in the cost of tuition. However, according to President Joan Coley, an increase in tuition is unavoidable due to decreases in income elsewhere, but the increase is relatively minor.
“Because of our rising prices, we have raised tuition for next year, but it is the smallest increase in recent memory,” Coley says.
The current academic year’s tuition, including room and board based on a double dorm and 210 meal plan, is $36,880.00. Williams says this year’s tuition increased by about four or five percent from last year’s tuition. Tuition for the 2009-2010 academic year will be $38,600.00, an increase of just under four percent, according to Williams.
Remaining affordable will certainly be a challenge in this economic environment. Aid from the state has been cut twice this year, resulting in a reduction of over half a million dollars. In the past, much of that money has been used for financial aid.
The college’s endowment has declined approximately 25 percent as a result of the stock market, according to Seidel. As of June 2007, the endowment was $89,697,000. Now, Seidel estimates that it is approximately $65 million. According to Richard Kief, vice president for Institutional Advancement, each year, five percent of a three year average of the endowment is drawn to support the operating budget. When the endowment is smaller, as it is this year, “we draw five percent of a smaller number,” says Kief.
The McDaniel Annual Fund may or may not suffer this year, but Kief says that if it does turn out to be down this year on top of the decline in the endowment, it will be even more difficult to maintain a balanced budget.
The McDaniel Annual Fund is financed by financial gifts that go into the college’s operating budget.
“Right now, we’re ahead on pledges and behind on cash. I can’t tell you if we’re going to end up where the pledges are or if we’ll end up where the cash is,” says Kief. But along with the others, Kief says the college is committed to meeting the financial needs of students regardless.
Fundraising has slowed down in general, not only for the McDaniel Annual Fund. Brenda Dombroski, associate director of Major Gifts, says that monetary gifts to the college have slowed down. While Dombroski says the college still has some generous donors, many are more cautious to immediately say yes to giving.
Kief says that last year, the college raised $15 million, and the year before $16 million. “The outlook for this year is going to be less,” he says. Exactly how much less is yet to be determined. He says they are currently in discussion with people who could make significant gifts, but he will not know until they make their decisions.
It is uncertain what the future holds for the economy and exactly how McDaniel will continue to be affected. Seidel suspects that McDaniel, along with every other college, will be more affected by this economy in the coming academic year.
“I really think that next year’s budget is going to see more of the impact than this year’s budget,” Seidel says.
No matter what the future holds, it is clear that McDaniel is not the only college facing financial challenges.
“McDaniel is in a club with 100 percent membership,” says Dr. Kevin McIntyre, an economics professor and a faculty representative to the Budget Committee.
Despite the challenges, Seidel remains optimistic about McDaniel’s ability to withstand the recession.
“We’re not going to escape unscathed, but at the same time we’ll come through it and be okay in the end,” he says.