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(02/15/18 1:48am)
College treasurer David Provost explained why Middlebury has a smaller endowment and provides less financial aid than many of its peers, and described how the college is working to improve on both fronts, in a presentation on Jan. 24 in Dana Auditorium.
Introduced by SGA liaison to student endowment affairs Will Dowling ’18, Provost addressed topics such as the previous college deficit and the relationship between college endowment and student financial aid. The presentation, which was followed by a brief Q&A segment, was a co-effort by the SGA and the finance office and part of the “How Midd Works” series.
Provost began his presentation by introducing the basics of the college endowment. Middlebury’s endowment reached $1.074 billion at the end of fiscal year 2017. Although it is up $74 million from the previous year, Middlebury’s endowment is overshadowed by its peers; Williams, Amherst and Wellesley each hold endowment sizes double that of Middlebury, at $2.568 billion, $2.248 billion and $1.97 billion respectively.
Bowdoin holds an endowment of $1.46 billion. In 2011, the two institutions had nearly identical endowments at $900 million. What accounts for the almost forty percent gap today?
Provost suggests that the difference is the result of poor operating budgeting. Between 2011 and 2016, total operating expenses increased at an average of 4.18 percent annually. However, net fees only increased at an average rate of 2.52 percent annually. In order to fill the gap between revenue and expenditure, funds were drawn from the corpus of the endowment.
Middlebury has since worked toward a solution to achieving financial sustainability. In fiscal year 2017, the college made significant budget changes to combat its deficit trend. Net fees increased by 3.5 percent, generating $151 million in revenue. Expenses, on the other hand, decreased by 1.4 percent — the first drop in nearly ten years. With the current plan in place, Provost estimates that the college will be able to reach operational surplus or neutrality by 2021.
Financial aid is also closely tied in with the endowment, as 20 percent of endowment usage of funds is funneled toward scholarships. Currently, 44 percent of students receive financial aid, and the average aid package is $47,000. Twenty-five percent of the total financial aid budget — nearly $13 million — is funded from the endowment and expendable funds.
Still, Middlebury lags behind its peers in providing financial aid. In 2016, Amherst, Williams and Pomona each offered grants to 50 to 60 percent of students, with an average grant of $50,000 to $55,000.
But Provost said Laurie Patton, Middlebury’s president, is looking to push the college’s financial aid program into the same competitive range as its peers. As a new cycle of fundraising is beginning, Patton may tailor the campaign to fit the theme of need.
Ultimately, Provost believes that his role is not solely to manage finances, but also to realize the college’s education mission. During the Q&A segment, Provost was asked why the college’s endowment was managed by Investure rather than in-house, in comparison to institutions such as Harvard and Williams.
“We could (bring endowment management in-house). However, I believe firmly that it is not core to who we are, that is not why we exist. That is not our mission and purpose — to be exceptional at investing our money. There are people who do that,” Provost said.
“We need to challenge ourselves on everything that we do: is it meeting [Middlebury’s] objective? When we decide to do things, spend money or invest in things, is it core to what a Middlebury education represents to its students?”
(01/17/18 11:22pm)
On Dec. 22, President Donald Trump signed into law a significant and controversial overhaul of the nation’s tax system, featuring large cuts for corporations and wealthy taxpayers. The legislation was passed by the Republican-controlled Congress despite opposition from large universities and small colleges alike, due to provisions that may significantly disadvantage some institutions of higher education.
Most glaring among the clauses affecting colleges is a 1.4 percent excise tax on endowment returns at private colleges which enroll at least 500 students, and whose endowment assets are valued at $500,000 per full time student. The endowment threshold initially sat at $100,000, encompassing scores of colleges, before being revised to $250,000 and finally bumped up to its current state in the final bill. As it stands, about 35 schools are likely to be affected by the endowment tax in 2018.
Middlebury, whose endowment per student averages $330,000-340,000, narrowly escapes the margin of taxability. However, given its current $1.073 billion endowment and a 10-year annualized return rate of 6.3 percent Middlebury may become subject to the tax within the next three years if its total enrollment remains around 2,500.
College treasurer David Provost estimates that if the tax had been levied against Middlebury in 2017, it would have reduced Middlebury’s annual investment income by up to $600,000.
The colleges expected to be newly taxed in 2018 range from Ivy League schools like Harvard and Princeton to NESCAC colleges including Amherst and Bowdoin. The new endowment tax may prove to be damaging to college initiatives such as research funding and financial aid. Harvard, for example, estimates that if the reforms had been law in 2017, it would have been required to pay $43 million to the federal government.
Large research institutions are not the only victims of the new tax. Some small colleges are especially disadvantaged, as much of their endowment revenue is funneled toward financial aid. Debby Kuenstner, the Chief Investment Officer at Wellesley, stated in 2009 that that a third of Wellesley’s endowment income goes toward scholarships.
Berea College, a small liberal arts college in Kentucky, is dealt a particularly devastating blow in regard to their financial aid program. Every year, 1,600 students receive a tuition-free education from Berea, whose $1 billion endowment covers all costs. However, with the new tax in place, Berea could face a significant financial obstacle, challenging its tuition-free system.
Although Middlebury will not face this new tax in 2018, other provisions in the GOP tax plan may harm the college’s finances. According to Provost, Middlebury previously took advantage of advance refunding of tax exempt debt, which saved the college millions of dollars in past years as a result of lower interest rates. This option will no longer be available to Middlebury.
In addition, changes to personal deductions may lower taxpayers’ incentive to make charitable donations. “Less people will itemize their deductions with the increase in the personal exemption. We are unsure if this will impact charitable giving to the college, but it could,” Provost said. “Time will tell.”
(11/16/17 12:56am)
The Student Government Association (SGA) Finance Committee has allocated $2,500 to help students receiving financial aid pay for Winter Term workshops. The SGA has added other improvements intended to streamline the application process and improve accessibility to workshops.
Every year, the Student Activities office hosts non-credit, student-led workshops, ranging from board game building to log rolling. However, since the workshops program does not have its own budget and is entirely self-sustaining, there is a fee for enrollment.
The SGA’s financial aid program was first conceptualized by former president Karina Toy ’17, student activities dean Derek Doucet, and former finance committee chair Kevin Benscheidt ’17 in the winter of 2016.
At the time, average enrollment costs stood at $33.50, and Toy recognized that some could impose a financial burden on students who wished to participate.
The previous model relied on a two-step reimbursement process, which caused a number of students who could not register in time to lose their aid opportunity. Under the SGA’s new policy, the aid application is embedded in the registration process for the Winter Term workshops.
“There will be no upfront payment required and aid awardees will not be billed,” said Jin Sohn ’18, the current SGA president. “Students’ spots will be held in the workshop until their eligibility for aid has been confirmed. In order to maintain confidentiality the SGA will never see the names of students who apply for or receive aid, nor any of their financial information.”
The finance committee, including chair Peter Dykeman-Bermingham ’18.5 and deputy chair Isabella Martus ’19, worked with Doucet and the financial aid office to implement a model that both protected students’ privacy and made it convenient to apply for aid.
“[We] wanted to remove any perceived social stigma from applying. We all know that issues of socioeconomic status are present on our campus, and we were concerned that students might be reluctant to apply if they thought their peers would be involved in any way in the application process,” Doucet said.
“We therefore needed to come up with a way to ensure it was only college staff who reviewed the applications, while still providing transparency so the SGA could see, in general terms, how their money was spent.”
In the new model, the Student Activities office collects aid applications and cross-checks with the Student Financial Services office to ensure that the applications meet the criteria set forth by the SGA. By serving as the only line of communication with applicants, the Student Activities aims to ensure confidentiality of student financial aid status.
In addition, Doucet worked to ensure that SGA assistance would not impact recipients’ overall financial aid status.
Dykeman-Bermingham hopes the program will enable more students to participate in a quintessential aspect of Middlebury.
“J-Term workshops are Middlebury’s most explicit format for students to learn from their peers. They are so often odd, fun filled monuments of student passion and they should be part of everyone’s Middlebury experience,” he said.
Registration for the workshops begin midnight on Sunday, Nov. 19, and end on Sunday, Dec. 17. Aid applications close on Dec. 9, and are awarded on a first-come, first-serve basis.
(10/19/17 12:12am)
As hundreds journeyed to campus last Friday for Fall Family Weekend, among the new arrivals was the first-annual Fall Faculty Forum. The event, held on Oct. 13 at the Axinn Center, featured presentations from 39 faculty members on a wide range of research topics.
The forum was primarily conceptualized and organized by associate professor of political science Jessica Teets, professor of film and media culture Jason Mittell and dean of faculty development & research Jim Ralph. It consisted of 12 faculty panels with topics ranging from global policy interventions to queer politics to the technologies of seeing.
“Our idea was to bring together [topics] that seemed similar enough that there would be a really good discussion,” Teets said.
Each 90-minute panel consisted of three to four faculty presentations, followed by Q&A sessions moderated by the panel’s chair. While the presentations were grouped by theme, the scope of each panel was interdisciplinary and approached its topic through multiple lenses. For example, in the Global Policy Interventions panel, topics included communities on the forest edges of western Uganda to the effects of abortion clinics shutting down in the United States.
Interstitials between the panels included a performance by Root7, a contemporary Vermont co-ed a capella group, and an exhibit that featured five garments dating from 1870 to 1925, courtesy of the college’s antique fashion collection.
“We are trying to create more of a research community, where people are seeing the research that everyone is doing and having conversations, and maybe even collaborating on research,” Teets said.
“[The forum came out of a discussion a group of faculty had about how do we create a better culture around research,” she explained. “We all love teaching so much, we tend to talk a lot about our teaching… but we don’t talk a lot about research, and so we lose that opportunity for that kind of learning. The idea was to really create more visibility [for research].”
The project was well-received by students, faculty, and parents alike.
Joanne Meagher, parent of Sean Meagher ’20, said, “It’s so nice to get a feel for what is really going on campus—things that I wouldn’t be privy to otherwise.”
“I am an economics and political science double major, so all of these were relevant to what I study,” said Neha Sharma ’18.5, who attended the panel on Global Policy Interventions, where her professor, Erick Gong, presented research.
“I found very interesting... what Professor Gong brought up at one point: what is the point of research? Is the point of research to move society and change the world or add to a body of knowledge?” she said.
The organizers see this pilot event as the beginning of a long-term project. “This is the first time it has ever happened, but our hope is that we are piloting something that will happen every year,” Teets said. “Our idea is that in the fall the faculty will present their research and then in the spring, students present their research.”
(10/04/17 11:47pm)
Following a tumultuous election cycle, Trump’s divisive victory astonished the nation, and its aftershocks were felt around the world. On Oct. 2, Student panelists Shane Healy ’18, Vignesh Ramachandran ’18, Dan Adamek ’18 and Eleanor Eagan ’18 shared the unique experience of studying abroad against the backdrop of Trump’s ascent to power. The event was sponsored by the Rohatyn Center for Global Affairs in partnership with International Studies and Off-Campus Study as its 15th Anniversary International Dinner and Panel. The event, entitled “Being Abroad In The Trump Era,” took place in the Atwater Dining Hall.
Healy, Ramachandran, Adamek and Eagan, who studied abroad in Japan, Jordan, France, and Morocco respectively, shared their own anecdotes before answering questions from moderator Tamar Mayer and the audience.
Eagan, the first panelist to speak, focused on the difficulty of finding refuge from American politics while studying abroad and the frustration of being unable to act in a time of political tension.
“When I was getting ready to go abroad, I was actually pretty excited to be leaving the U.S.,” Eagan said. “The rhetoric had become pretty toxic at that point and it wasn’t particularly fun following the news. I was, I guess naïvely at this point, confident that Hillary Clinton was going to win the election, and I wasn’t particularly worried about the Trump phenomenon. In Morocco, I mostly found refuge from talking about American politics and Trump.”
Following the result of the election, Eagan returned to the U.S. for winter break and attended the inauguration. She would later participate in the Women’s March in Montpelier, VT before having to quickly return to Morocco. Eagan noted that returning to Morocco following her brief break was especially challenging.
“I was feeling like I wanted to do something, and I knew going to Morocco that it was easy to become apathetic when you aren’t living in [the U.S.],” Eagan said.
Ramachandran, who studied in Jordan, felt that Trump’s presidency prompted more discussions about politics. Since the Arabic language curriculum introduced the subject of the U.N. very early on, he quickly established the linguistic foundations to facilitate such conversations about the political climate in the U.S.
Exploring the topic of Trump’s presidency in a spectrum of settings between classrooms and taxi cabs, Ramachandran concluded that there was a dual phenomenon of a fascination and disappointment with the U.S in Jordan. The disillusionment with the U.S. stems mainly from its policies against refugees, Ramachandran said.
“There were a lot of people who carried resentment for the United States, and we saw that, especially [toward] the people who thought Trump would be a valid solution [to the refugee crisis],” Ramachandran said.
In Paris, Adamek also engaged in political discussions as France encountered a similar rise of right-wing nationalism.
“In the days following, [the results of the French election] elicited fears that a similar situation was unfolding in France during the French election,” Adamek said.
During his time in Paris, Adamek was often approached and questioned about how the Trump victory unfolded, with many hoping to prevent a similar scenario in France. Thus, despite living abroad, Adamek felt connected to the political climate of the U.S. through a similar rise of right-wing nationalism within France.
Healy noted a fascinating phenomenon during his studies in Japan where interest toward the U.S. election dissipated after the results were released.
“My perception, in general, about how [Trump’s rise] was perceived in Japan was that it was all about the election,” Healy said. “Once the election had finished and there was a candidate who had won the presidency, interest went way down. I felt that a lot of the people around me were just waiting for an answer.”
In addition, Healy spoke about how media coverage greatly influenced public opinion on Trump. During the election, Japanese media wrote unfavorably of Trump in response to his criticism of Japan’s trade laws and security spending. However, after a relatively successful meeting between Trump and Prime Minister Shinzō Abe, the media toned down its criticism and opinions of the President began to neutralize.
Despite the varying experiences and narratives of the panelists who studied abroad, a shared emotion was the discomfort of trying to explain the situation without all of the answers.
Eagan remembers regretting her decision to disclose the news with her host mother, as she quickly became the fount of knowledge on the matter. Adamek faced a similar experience in the classroom setting.
“Everybody would look to me as the American reference in the room,” Adamek said, “But I wouldn’t know what to say.”