Tilghman: No University budget changes

The University is prepared for difficult times, Tilghman said, adding that “we have a cushion.”

The endowment increased by 5.6 percent in the 2007-08 fiscal year, keeping Princeton among the American universities with the largest endowments. This return, however, was significantly smaller than the 24.7 percent increase in the 2006-07 fiscal year.

“We built into all our financial models the expectation that there would be years like this,” Tilghman explained. “The tune I have been humming over last two months is ‘Momma said there’d be days like this.’ ”

Because of this anticipatory strategy, the University will not change its budget this academic year, despite the changes other universities have already made in the wake of the economic slowdown, she said.

“As we currently look at this academic year, we do not see any reason to make any changes in the operating budget,” Tilghman explained. “We are not doing what other universities have announced, such as budget cuts, because of the very prudent management of this University and its endowment over a period of time.”

Instead, Tilghman said, the University is looking to conserve resources in coming years by strategies such as postponing projects slated to begin in 2010 and 2011, for instance.

“We are proceeding cautiously,” she said. “I think there is as much risk in overreacting as there is in under-reacting to what’s happening in the markets.”

Though this year’s budget will not be revised, the University still isn’t taking any chances, Tilghman said.

“We’re checking every year to make sure that we are preserving the value of the endowment for future generations while at the same time not cheating this generation out of having as wholesome a Princeton experience as possible,” Tilghman said.

Effects on financial aid

The Financial Aid Office, on the other hand, has already experienced tangible effects from the troubled economy.

“The impact we felt first in the University were students showing up at the office of financial aid telling us that their families have experienced financial downturns,” Tilghman said. “This includes both students who never expected to receive financial aid and students who were already on financial aid but now need expanded packages.”

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Increased student financial need will create a $2.8 million demand for which the University had not budgeted, Tilghman explained.

Still, the University aims to meet every single one of the requests it gets for additional financial aid, she said.

“Our highest priority is to ensure that there is not a single student who can’t attend Princeton because of financial responsibility,” Tilghman said. “We’ll look carefully at [financial aid] applications, but our goal is to meet [the need for aid].”

Tilghman said her certainty about meeting financial need stems from the fact that last year’s Annual Giving campaign surpassed its fundraising goal by $5 million.

Though Tilghman said she is confident the budget will not have problems in the short run, she did not make any guarantees about the long run. “The length of time of the downturn is critical,” she explained.

The meeting also saw the enactment of memorial resolutions honoring faculty members who had recently passed away, including comparative literature professor Robert Fagles, chemical engineering professor Ernest Johnson, history professor Michael Mahoney GS ’67 and civil engineering professor Steve Slaby.