Financial Slowdown Hits Area Universities

The current financial crisis has reached a point to where even local colleges are beginning to feel the crunch. As more students are in need of financial assistance, the schools are dealing with shrinking endowments. With these endowments, which fund up to a quarter of the schools costs, bringing in smaller returns, the schools are having to rework budgets.

"Everyone's feeling pressure," says Will McLean, Northwestern's chief investment officer. The university's $7.2-billion endowment, which funds almost 20% of school operations, produced returns of 3% during the 12 months ended in August, compared with 22% in the year-earlier period.

In a university memo last month, Northwestern President Henry Bienen warned: "We will look very closely at any incremental costs, and we are not likely to add new faculty or staff positions."

• Hedge funds account for a large chunk (30 percent) of funding for the University of Chicago. During this latest financial crisis, hedge funds have produced a 5.5 percent loss in September alone and more than 10 percent in 2008 so far.
• Since June 30, the University of Illinois has seen its endowment shrink by 20 percent.
• DePaul University's endowment was at minus 10.2 percent from June 2007 to June 2008 and an additional 11 percent since June 2008.
• Loyola's endowment produced a minus 5 percent loss from June 2007 to June 2008 and a 10 percent loss since June 2008.