Statement on Economic Climate
Nov. 4, 2008
Dear Members of the Susquehanna Family,
For the past month, we have all watched with dismay the deterioration of our nation’s economy. Individuals as well as organizations, including Susquehanna, are being affected in many ways. The challenges facing all our families are much on my mind and on the minds of all of Susquehanna’s trustees, who met recently.
I write to share with you an overview of our analysis of Susquehanna’s financial position, and our thinking about how we are preparing to manage the future. In addition to this letter, an FAQ (frequently asked questions) page with more detail is available. That page also includes a link to a Web form where you can submit questions.
For some students and parents, a first question is likely to be about financial aid. I can assure you that there will be no midyear tuition increases or reductions in aid packages, and our expectation is that we will continue to base future financial aid packages on the assumptions that have guided our program for many years. I would encourage anyone with concerns about matters related to financial aid to be in touch with our staff by calling 570-372-4450 or by e-mailing email@example.com.
Susquehanna’s financial position is relatively strong. While the market value of our endowment has declined, it has almost no exposure to the riskiest investment instruments. Because of the trustees’ prudent investment management and the board’s conservative spending policy for the endowment, we do not anticipate any negative impact on funds available for spending this year and foresee only a modest impact for next year. Further, the great majority of our debt is fixed rate. Therefore, we have little exposure to the interest rate fluctuations that have affected institutions with significant amounts of variable-rate interest debt. Our trustees’ long-term stewardship has resulted in 31 years of balanced budgets with positive financial margins, which means that we have accumulated cash reserves that can be deployed if the financial turmoil continues for a long period. We have funds in hand to complete the new science building and West Village student housing complex. Most important, our student recruitment and fundraising results project continued growth for the year ahead.
Still, it is clear that nobody really knows where this is all headed. Some argue that we have hit the bottom; others say the fundamentals of our economy are so weak that we can expect a deep and long-lasting recession. For those of us responsible for steering Susquehanna in good times and in not so good times, it is prudent to develop plans for a variety of futures. No matter what happens, I want to assure you that we will continue to live by our promise to provide an exemplary undergraduate education. Should decisions about contingency measures be necessary, they will be guided by our commitment to sustaining the highest quality educational experience possible for our students.
The Susquehanna family includes students, parents, alumni, friends, faculty and staff, and our strength is our shared sense of purpose, connectedness to one another, and concern for all. We are all bound by a desire to be sure that our students receive the best preparation for career and for life. Susquehanna’s balance of liberal arts and professional programs, its emphasis on theory and practice, offered by faculty intensely committed to their students’ success, has never been more valuable. We will work together to sustain these commitments.
L. Jay Lemons