October 31, 2008

Admin to examine cost cutting in light of financial crisis

The provost is working with deans and vice presidents to find areas where the University can cut costs, President Robert Zimmer said in an interview Tuesday. He emphasized a commitment to limiting financial aid cuts.

Overall graduate financial aid could be impacted, he said, but individuals’ aid packages and Odyssey Scholarships will not be affected.

“Decreasing financial aid is off the table,” he said, referring to individual aid packages.

The endowment will decrease this year, according to Zimmer. That drop and the announced cost-saving efforts come as the University faces strained finances due to the economic crisis.

“I will say that I believe that there is probably a serious decrease in the endowment,” he said, anticipating that the decrease will be comparable to those at other universities. Zimmer would not disclose projections, citing continued uncertainty, but added that numbers will be disclosed in November.

“We expect to be going down at the same rate as everyone else,” he said.

Presidents of peer institutions have expressed similar concern over the financial crisis.

Some universities have reported endowment drops over 30 percent, with many more experiencing losses above 10 percent.

“We’ve got a lot of ambitious plans for the University, lots of capital projects planned; whether we can do them all on the schedule that was anticipated, that’s not clear. Whether we’ll be able to hire everyone we want to on the schedule we want, that’s not clear,” Zimmer said.

Zimmer would not name projects that are at risk for budget cuts. Long-term construction plans seem particularly at risk; the University is still in the process of locking down funding for expansions in the housing system, the proposed renovation of the Ellis Avenue science quad, and structural renovations if Chicago is awarded the 2016 Olympic Games.

But he added that students might not notice the impact.

“We’re not going to be seeing something where all of a sudden life is changed,” he said.

Zimmer pointed to the investment committee of Board of Trustees and the chief investment officer as authorities on University finances, but said he has also enlisted the deans of University divisions to locate cost-saving measures.

“It’s the kind of thing where we asked vice presidents and deans, ‘You’re doing lots of things. Is every single thing you’re doing really of the absolute highest level of priority?’” he said.

Dean of Students in the College Susan Art said the push for deans to find cost-saving measures is still in the early stages.

“We’re beginning to think along those lines and prepare ourselves,” she said. “It’s just about trying to think creatively and be nimble, so we’re ready to deal with whatever scenario we face over time.”

Art said it was still unclear what kind of measures deans would suggest. Hiring freezes might be considered, she said, but added that she had not heard that the measure had been proposed.

“That would be one kind of suggestion,” she said. “Whether that’s the right suggestion—I don’t know if that’s the best suggestion.”

In an e-mail to the University community, Zimmer’s request for input extended down the ladder. He welcomed advice, encouraging students to “share [ideas] with your dean or vice president.”