The financial crisis isn’t isolated to Wall Street and Main Street. It’s also having an impact on academia. Today I received a letter from Ithaca College President Tom Rochon explaining my alma mater’s attempt to grapple with these challenging times and dwindling endowments. At Ithaca, the problem is complicated by a lower-than-expected enrollment this year.

The 242-student gap between planned and actual enrollment has consumed most of the contingency provided for in the current year’s budget. In addition, as I am sure you are aware, the overall state of the economy is placing additional pressures both on enrollment and on the returns we can expect to generate from our endowment. While our diversified asset allocation strategy is serving our endowment portfolio well, it does not make us immune from the effects of wavering stock and bond markets. We need to prepare for flat or even reduced support from our investments for the operating budget as we plan for next year. We also need to plan for increased interest rates on the College’s long-term debt, due to the lack of liquidity in credit markets.