After two weeks of economic volatility, college administrators remain uncertain how events on Wall Street will affect Maine Street.
President Barry Mills said that he is most concerned about the pressure of college costs for families, the effect of increasing oil and gasoline prices for employees, and the diminishing retirement accounts of employees, particularly of faculty members.
"Like all of America, I think this is a time for us to be...thinking about what our priorities are," Mills said.
During the last fiscal year, which ended June 30, the endowment earned a 1.3 percent return?a figure that is substantially lower than last year's 24.4 percent return, but, according to Mills, "compares quite favorably to the market."
According to Director of Student Aid Stephen Joyce, 65 to 70 percent of the $22 million that Bowdoin has awarded in grant aid this academic year comes from the endowment.
"The money is safe, it's secure," he said.
Joyce is confident that Bowdoin will remain affordable to families.
"It would be rather short-sighted of us to find ourselves in a situation where people couldn't afford Bowdoin," Joyce said.
"Having a down economy is not new, we've gone through down economies before," he said.
Joyce said that every year his office examines whether families' finances are keeping up with cost increases of attending Bowdoin. The assessment considers families' cash and savings, investments, home equity, and employment.
"I'm not too worried about declines in home equity at this point," Joyce said, explaining that home values "have been falling for a couple of years now."
Asked what it would take for Bowdoin to discontinue its need-blind admissions practice, Joyce said, "There'd have to be a dramatic financial change."
"I don't think its anything that people are talking about right now," he added.
While Joyce is not concerned with Bowdoin's ability to meet students' financial needs, he did acknowledge that it is a "nervous time for families."
"We'll be able to ride this out with families for the next year, or whatever it takes," he said.
Bill Torrey, the senior vice president for planning and development and secretary of the College, said that there is "no question that what's going on with Wall Street will make it more difficult to secure [annual giving.]"
Torrey described the last fiscal year as "an excellent year," but he said that he expects fundraising this year "will be tougher." The College acquired $43 million in donations during the last fiscal year.
"We won't know until the end of the calendar year how [the economy] will really affect new commitment, because it's just too early in the fiscal year," Torrey said.
Despite the volatile economy, Torrey said that the capital campaign, which was launched in November 2006, "is currently on target to raise the $250 million." So far, the College has received about $236 million in commitments.
"We feel confident that we'll hit our goal by next June 30," Torrey said.
Don Borkowski, director of capital projects, said in an e-mail to the Orient that the current economy will not interfere with projects that are already underway because financial commitments and contracts are already in place.
"Regarding future projects, I imagine things will slow down, as the current uncertainty in the financial markets will force more people to become conservative with their assets. This would impact giving. Also, due to the current market, our future planning will most likely have to be adjusted along with the allocation of capital funding," Borkowski wrote.
Concern about the economy's effect at Bowdoin extends beyond the success of the endowment and fundraising.
According to a study done in 2007 by the Maine State Housing Authority, the median home price in Brunswick had increased 70.7 percent in the previous seven years, while the median income of homeowners had only increased 17.8 percent in that time. Similarly, the median rent for a two-bedroom home increased 33.1 percent since 2000, but the median income of renters only saw a 13.2 percent increase.
According to Craig McEwen, professor of sociology, "people with less income are pressed...to live further away [from the College,] which means that their commuting prices are higher."
Fuel prices also correlate with food costs. Associate Director of the Dining Service Ken Cardone said that food prices began to increase last year.
"Fuel really had a terrible effect on food," Cardone said.
Not only did food prices increase as a result of transportation fees, but also, he explained that the crops that farmers chose to plant were related to fuel costs. Many farmers shifted from producing wheat and meat to growing corn for ethanol products. This change affected the prices of wheat and meat.
"Things went crazy, and we made a lot of adjustments," Cardone said.
Cardone said that the Dining Service is buying more local and seasonal products, and it is using more produce from Bowdoin's organic garden. A new freezer was recently added to Thorne Hall so that more food could be purchased in bulk or in advance to keep costs down. The Dining Service even noticed the increasing costs of stainless steel and copper when it was looking to buy new kitchen equipment recently.
In order to save money, Cardone said, "You just have to look at things a little more creatively."
Professor of German Steven Cerf is concerned but optimistic about the economy.
When asked if he thought he would have to retire later than he would like to, Cerf said, "I think it's too early to judge."
"I'm temporarily encouraged because the Republicans and Democrats are working together," Cerf said.
"Obviously I'm concerned [about the economy], but I think...if the financial first-aid is administered, we can go on," he said.
For junior Luke Potter, a Maine native, national economic turmoil has not yet hit home.
"It's not something that I'm entirely familiar with," Potter said. "I heard on the news that it was a crash of sorts, but I feel like they were trying to spark something."
Shana Natelson '10 recently changed her homepage on her computer to CNN.com in order to get more information about news outside Bowdoin. Even so, she said, "I don't really speak economics, so my knowledge of the situation is very basic."
"I think people understand that there's a huge problem with the economy right now, but I don't think people are taking it seriously...[because] the effects aren't palpable yet," Natelson said.
"It's not like a bottle of water costs $10 yet," she added.
Sophomore Bryant Johnson said that his family is "one degree away from being nomads."
"I come from a line of hobos who rode the rails back in the '30s, and while I wouldn't be looking forward to it, I wouldn't consider it the end of the world to revert to such a lifestyle," Johnson said.