The University of Western Ontario budget maintains funding for need-based student scholarships, in spite of investment income losses on endowments.
As of February 28, endowments held by Western were $21.1 million ‘under water’ or below the originally donated amount. These endowments are used to fund student scholarships, awards and bursaries, as well as salary and benefits of faculty positions.
To preserve these endowments, the Board of Governors approved a modified investment payout policy effective April 30 which reduces payouts of ‘above water’ endowments from 4.5 per cent to four per cent annually, and payouts of ‘below water’ endowments reduced from 4.5 per cent to 2.5 per cent annually.
A similar reduction has been made for payouts from endowment funds held by Foundation Western, which leaves less money available for student financial support and endowed faculty positions.
In spite of this financial constraint, the 2009-10 budget commits to ensuring that no qualified student is unable to attend Western or required to withdraw from an academic program for lack of access to adequate financial resources.
The university will be covering the expected $1.4 million shortfall in funds from private sources for needs-based awards and bursaries with the 2009-10 carry forward funds within undergraduate and graduate student aid budgets.
“For 2009-10 on the undergraduate and graduate side we have means to cover off the needs-based (scholarship) shortfalls, which is a good thing,” says Fred Longstaffe, Provost & Vice President (Academic).
Although money is available to fill in this year’s gap, Longstaffe cautions the university might have to look elsewhere for funds to maintain its student aid guarantee.
“We will stand behind our student need guarantee and we have the funds in place right now to handle that for 2009-10. But if there was a significant downturn in the endowment base … then we are going to have to draw on our operating budget, which we would have to sustain. We are keeping an eye on that.”
During its April 17 meeting, Senate recommended the Board of Governors’ approval to authorize the Office of the Registrar to adjust the value of privately endowed scholarships, awards and bursaries as required by the endowment payout policy of the board.
In the past, if the expendable portion of an endowed scholarship fund fell below the scholarship value, it was not awarded that year. However, the recommendation, as prepared by the Senate Committee on University Planning, proposes scholarships be paid out in lesser amounts, ensuring the scholarships continue to be awarded.