Updates on College Finances

To the Williams Community,

I would like to bring you up to date on the process, both on campus and with the Board of Trustees, of determining the College’s next financial steps.

We are operating in unsettled and, for us all, unsettling times. I admire and thank all of you who have been rising to the occasion by adjusting to new ways of doing things and planning creatively how Williams can best adapt to these new circumstances.

Our situation, described in detail at http://provost.williams.edu/?page_id=182 , is best summed up in the conclusion that “Williams is in a strong financial situation by virtually any comparison—except with the Williams of three years ago.”

Over that time, the value of our endowment dropped by $500 million and there is no reason to believe that it will grow at anything like the unprecedented rate that it did in the fifteen years before the market crisis.  Meanwhile the annual cost of financial aid increased by $16.2 million and gifts slowed, as expected in a recession.

The College’s focus is on adjusting to this new reality in ways that protect our core academic mission for the long run, keep Williams widely affordable and accessible, and value the great dedication of our faculty and staff.

As we move toward that goal, here is where things stand on several issues.

Construction Projects

The Trustees have re-affirmed both the importance of the Library and Weston Field projects and their current programs. Since prudence dictates not starting them in 2010, we will use the extra time to advance the projects’ financing and the resulting structures’ sustainability and adaptability for possible future changes in patterns of use, with the goal of beginning construction in the 2011-12 academic year.

Financial Aid

Making a Williams education available to students from all financial backgrounds has long been among our deepest values. That is why our expenditures on financial aid have tripled in the last ten years (from $14.6 million in 2000-01 to $43.7 million in 2009-10) and why financial aid was the only item in our budget to increase this year as it will be in the next. The continuous review of our aid policies is among the most careful of the College’s long-term deliberations. In recent years a focus of those discussions has been on determining appropriate loan levels.

Our loan expectations were already among the lowest in the country (and zero for the lowest-income students) when we eliminated them for all aided students beginning in 2008-09. It now seems prudent to reintroduce modest loans for some aided students, beginning with the class that enters in the fall of 2011. No current students will be affected; neither will those who enter this fall. As before, families below a certain income, and with typical assets, will not be expected to borrow at all. Others will be offered loans on a sliding scale up to a maximum size that will again be among the lowest in the country. After four classes have entered through this program, it will make available about $2 million per year.

Our financial aid program will continue to be one of the most generous anywhere, as it should be, and we are convinced that Williams will remain financially attractive to aided students at all levels of income.

Structural Reorganization

The College has no plans to reduce the salaries of current faculty and staff. To hit our spending targets for the coming years, we will, however, have to spend less on compensation, which currently accounts for 62.5% of our spending outside of financial aid. As the College’s financial strength grew substantially over the decade leading up to the global economic crisis, so did our number of faculty and staff, to levels among the highest compared with similar colleges. The challenge is to reduce these numbers somewhat, in a way that honors the commitment of our remarkable faculty and staff.

We have realized savings by not filling many open positions, and while that process will continue, it will not by itself bring us to sustainable levels. We therefore anticipate offering to faculty and staff some form of retirement incentives, the details of which will be worked out in the coming months. Operating with somewhat fewer faculty and staff will require further thoughtful planning on what departments, programs, and offices can and cannot do and how we can reorganize to maximize efficiency. That planning will engage representatives of the whole campus community.


The key to the College’s current planning is adaptability, a trait that has served Williams well through its history. In our current situation, this means reducing our spending so that we can return as soon as possible to where, if capital markets remain steady, our operations can stabilize and rebuild momentum from their new, smaller base.

I know how hard it is to hit challenging spending targets and to alter how we work (and even how much we work) because of faculty and staff positions left unfilled. Thank you for your dedication and flexibility. I am grateful to the Trustees for their wise counsel and for the patience that enables us to plan thoughtfully. I appreciate the sacrifices that families make to pay for their children’s Williams education. And I am encouraged by the engagement and ongoing support of our alumni, parents, and friends, especially at this key moment.

For these reasons and more I am confident that this period will be looked back on as another in which Williams adapted to its times with care, foresight, and a shared sense of purpose.

With regards,
Bill Wagner
Interim President