Seattle_Mike Westfall calls it the second wave of bad financial news on campus. First came a dramatic drop in university endowments. Now students and their parents are learning those same endowments are short of money for next year's college scholarships.
It's a national issue, but small regional universities with less than epic endowments are feeling the pain most sharply, said Westfall, vice president for university advancement at Eastern Washington University in Cheney, near Spokane.
A survey from the nonprofit Commonfund Institute of Wilton, Conn., found that college endowments across the nation lost an average of 24 percent of their value during the six months preceding Dec. 31, 2008.
How that drop in endowment value is affecting scholarship money is now becoming more clear.
For the current academic year, Eastern's foundation provided $500,000 for about 500 scholarships. After a 20 percent drop in its endowment, the foundation will be able to provide only about $100,000 for next year's scholarships, Westfall said.
"Over 50 percent of our students are first-generation students. First-generation students tend to be more dependent on financial aid. To take that away is troubling," he said.
Eastern has turned up the volume on its annual fundraising and created a new scholarship Web site to try to make up the difference, but some colleges are canceling scholarships entirely.
An endowment drop of 22 percent at Rhode Island College put most of the school's endowed scholarship funds "underwater" - below the amount of money used to start the fund - so the college foundation has decided to suspend payment of endowed scholarships for next year.
Because of a drop in its endowment, the University of Wisconsin-Superior plans to give away about $100,000 less in endowed scholarships for next fall.
Other universities have laid off staff to prevent cutbacks in other areas, such as scholarships and endowed teaching and research positions.
The University of Washington has seen the value of its endowment drop about 25 percent over the past few quarters. Although the university has cut 70 jobs from its fundraising office to save money, the prospect for next year's scholarships is still uncertain, said Kay Lewis, director of student financial aid.
The UW's students rely heavily on state and federal dollars for financial aid, and since that money is up in the air until the Washington Legislature figures out how to handle the state's economic downturn, Lewis said the university has stepped up its scholarship fundraising.
"We're getting quite a few calls from students wondering what their aid will be like next year," Lewis said. "At this point, we're telling them they'll just have to wait."
Western Washington University in Bellingham has also increased scholarship fundraising to make up for a 30 percent drop in its endowment, which has resulted in a decrease from $900,000 in endowed scholarships this academic year to a projected $200,000 available next year, said Stephanie Bowers, vice president for university advancement and the Western foundation.
The university also distributes another $800,000 from an annual scholarship campaign, but officials are pushing hard to see that number rise to make up for the loss in endowed scholarships, Bowers said.
She said the university is asking every endowment donor it can reach if he or she can afford to make a special donation this year, and Western also is running a special faculty and board member fundraising campaign.
Bowers said the prospects for next year are bleak, but she remains hopeful about the future.
"When you work for a foundation, you take the 100-year view," she said.
On the Net:
EWU Scholarships: http://www.saveourscholarships.net
Commonfund Institute: http://sn.im/dnh4v