Institutions Respond to Ukrainian Invasion
Colleges and universities across the United States have been providing support to Ukraine in the wake of the invasion by Russia. They are offering a variety of services for students and faculty members, advocating for government aid policies, and reevaluating their endowment investments.
Data from Open Doors, annual research conducted by the Institute of International Education, shows more than 1,700 Ukrainian students were enrolled in American institutions in the 2020-2021 academic year. In addition, more than one million people in the country have Ukrainian ancestry, according to 2019 U.S. Census Data
Some institutions have issued statements denouncing the invasion and offering services to students and others on their campuses who’ve been affected by it. For example, Eric J. Barron, president of Pennsylvania State University sent a message to the university community sharing information on counseling and mental health services, including a 24/7 crisis hot-line staffed by licensed professionals, and encouraging students and faculty members to contact the university’s programs for international-student and scholar advising and employee assistance. “Our world and our collective fate are intrinsically tied together as a global society,” Barron stated. “As a community of higher learning, and as citizens of the world, we have an opportunity to learn from and explore this troubling time together.”
At Syracuse University, Chancellor and President Kent Syverud also sent a university-wide announcement offering student advising and mental-health resources to those who needed them. He also acknowledged the large number of people in the university community who had ties with both Ukraine and Russia or were active-duty members of the military. “They and their families may have their lives changed dramatically on short notice to the response to this conflict,” he said.
Besides such campus-wide communications, college presidents are coming together through their associations to press for federal policies that benefit Ukrainian students. The Presidents’ Alliance on Higher Education and Immigration urged the Biden administration to swiftly provide special relief for Ukrainians studying in the United States. Stated Jill Welch, senior policy advisor of the alliance: “We are glad to see a swift temporary protected status designation for Ukraine; now we urge the Department of Homeland Security to move quickly to provide Special Student Relief (SSR) for Ukrainian and other students who need the flexibility to drop below course load and to work off-campus to mitigate financial strain during these extraordinarily challenging times.”
On the financial side, some colleges and universities have announced they are divesting themselves of Russian investments in their endowments to protest the invasion. As reported in Inside Higher Ed, the Arizona Board of Regents has “added the three-university system to a small but growing list of institutions that have severed economic ties with Russia.” The board also plans to reallocate Russian assets in its retirement fund and has told its campuses to cease any programs with Russia. Fred Duval, chair-elect of the board noted that the system has only about $4 million of its $1.2 billion invested in Russian assets, so the impact will be mostly symbolic. But he said such divestment is meaningful and encouraged other higher education pension funds to follow suit.
Governors in other states have, in fact, encouraged their colleges and universities to make such a move. Virginia Governor Glenn Youngkin has asked institutions in that state to “divest in a prudent and orderly fashion any and all holdings of the Russia ruble and any and all securities of Russian companies.” Jared Polis, governor of Colorado, also has urged state institutions to divest, and the University of Colorado has done so and also asked its mutual funds, which hold about $3.5 million in Russian investments, to exit those investments “as early as allowable.” Todd Saliman, the university’s president, said in a statement: “We are looking for ways to show our support for the people of Ukraine and believe cutting our investments is the right thing to do.”
More Women Gain Presidential Positions
Women and people of color have always significantly lagged White men in securing college or university presidencies. According to the most recent American College President survey conducted by the American Council on Education, only about 30 percent of those presidencies are held by women and a mere 5 percent by women of color. But that trend may be changing somewhat, as nine more women, including several from minority groups, have been inaugurated or named heads of higher education institutions during the past months.
Those inaugurated include Laurie Carter at Lawrence University in Wisconsin, Montserrat Fuentes at St. Edward’s University in Texas, Krista Newkirk at the University of Redlands in California, Lori Varlotta at California Lutheran University, and Barbara Wilson at the University of Iowa.
Also recently named president were Jill Baren at Lake Forest College in Illinois, Shari McMahan at Eastern Washington University, Pat Pitney at the University of Alaska, and LaTonia Collins Smith at Harris-Stowe State University in Missouri.
As noted in University Business, these new presidents are “already promising formative change” at their institutions. Fuentes is the first Hispanic president and second woman to lead St. Edwards. She has worked to promote diversity, equity, and inclusion (DEI) throughout her career, and at her inauguration she stated, “I want to celebrate our long history of inclusion by cultivating a vibrant campus and distinctive academic experience for all our students, regardless of their background or identity.” Collins Smith is the first African-American woman to lead Harris-Stowe and has said she wants to make sure that the university educates more minorities to enter rewarding STEM fields.
In addition, Pitney and Varlotta are the first women to hold the position of president at the University of Alaska and California Lutheran, respectively. Varlotte is also a first-generation student, and she has “spearheaded the development and implementation of a new and highly coordinated DEI structure” at California Lutheran, according to the university.
Endowments Soar, Yet Spending Rates Remain Conservative
College and university endowment returns and asset values climbed significantly between 2020 and 2021, according to an annual survey conducted by the National Association of College and University Business Officers (NACUBO) and TIAA. In the 2021 NACUBO-TIAA Study of Endowments, which surveyed 720 institutions representing $821 billion in endowment assets, the average one-year return was 31 percent for the 12 months ending June 30, 2021. That compares to an average return of less than 2 percent the preceding fiscal year, when the stock market experienced strong volatility in response to the COVID-19 pandemic.
The average size of endowments participating in the survey was $1.1 billion, although more than half reported less than $250 million in assets. Endowments of all sizes experienced strong results, with even the lowest rates of return reaching more than 20 percent.
Besides benefiting from improved stock market performance, endowments—especially small and medium-sized ones—also received more new gifts than in 2020. For the first time, the survey measured how many institutions received gifts targeted for diversity, equity, and inclusion initiatives, including scholarships, research programs, endowed chairs, and other faculty support. About 65 percent had received such gifts.
Despite the soaring returns, the participating endowments reported an average annual spending rate of 4.5 percent, the same as in 2020. “The spending rate didn’t drop last year in the face of low returns, and it hasn’t risen in the face of higher returns,” said Susan Whealler Johnston, president and chief executive officer of NACUBO, according to the Chronicle of Higher Education. “The pandemic suggests that endowments will continue to take a conservative approach to managing their spending,” she said.
Student financial aid received the largest percentage of endowment spending (47 percent) among the 2021 survey participants, followed by spending for academic programs and research (15 percent), endowed faculty positions (11 percent), and campus facilities operations and maintenance (9 percent). In addition, more than half of the endowments provided greater support for their institution’s operating budget.
The survey reflects that endowment managers predict inflation and other economic challenges will remain issues over the longer term, noted Doug Chittenden, head of client relationships at TIAA, a co-sponsor of the report. “Fiscal year 2021 reflects a unique moment in time with exceptional circumstances,” he said. “Endowments benefited from a broad market recovery from volatility at the pandemic’s onset, but they also see more challenging market conditions ahead and have been adjusting their expectations.”
Chittenden observed that “inflation will likely be a concerted focus of asset allocation discussions as endowments strive to maintain portfolio approaches best aligned with their core mission.” Asset allocations of endowments generally remained the same in 2021 as in 2020, but the study suggests that managers will most likely be considering adjustments in the future to respond to rising interest rates, surging inflation, and tightening monetary policy.
Higher Ed Leaders Generally Sanguine about the Future
Despite all the challenges they continue to confront, most campus leaders are confident and optimistic about their institution’s financial situation. In Inside Higher Ed’s 2022 Survey of College and University Presidents, the majority of respondents said they believed their institution is financially healthier than it was a year ago and will be in even better shape next year than it is now. And more than three-quarters agreed that it will be financially stable over the next decade.
At the same time, college presidents seem to recognize that their institutions will have to evolve to succeed in a new and different higher education landscape. Seven out of 10 said their college or university must change its business model or other operations. In addition, more than 9 out of 10 agreed that, even after the pandemic ends, their institution should retain some of the COVID-related changes it has made. In fact, more than half agreed that the pandemic would cause higher education institutions to shift to more virtual instruction “for years to come.”
U.S. Supreme Court Rules in Support of Houston Community College Board
In a unanimous reversal of a decision by the U.S. Court of Appeals for the Fifth Circuit, the U.S. Supreme Court concluded in March that the board of trustees of Houston Community College (“HCC”) did not abridge the First Amendment rights of one its trustees when it verbally censured him through a board resolution for what it deemed reprehensible conduct not consistent with the best interests of the college. The trustee brought multiple lawsuits challenging the board’s actions, arranged robocalls to the constituents of certain trustees to publicize his views, and hired a private investigator to sur- veil another trustee, seeking to disprove her qualification for office.
The court’s decision was a narrow one, focusing purely on verbal censures of one trustee of a public institution’s board by the other members of that board. It concluded that when it comes to disagreements among public board members of this sort, “longstanding practice suggests an understanding of the First Amendment that permits ‘[f]ree speech on both sides and for every faction on any side.’” As a result, it found that the HCC Board of Trustees’ verbal censure did not constitute a denial of the trustee’s First Amendment freedom of speech rights. With respect to the litigious ways of the trustee against the governing board that he served on, the court noted that argument and counterargument, not litigation, are the weapons available for resolving such intra-board disputes.
The court’s holding was consistent with the arguments advanced by AGB in its amicus brief in support of HCC. While not directly addressed in the decision, the ruling also supports the broader principle espoused by AGB of the right of the governing board of a public higher education institution to govern itself, consistent with its fiduciary duties, including through censuring its own members.
Two College Groups to Revise Carnegie Classification System
The Carnegie Foundation for the Advancement of Teaching and the American Council on Education (ACE) are joining forces to compile the next version of the Carnegie Classifications, with the aim of transforming them “to reflect the nation’s pressing social, racial, and economic concerns.” They also hope to use the classifications to challenge higher education institutions and their partners in the public, social, and commercial sectors to meaningfully address those concerns, according to the announcement.
Established in 1970 and first published in 1973, the classifications form a framework that defines different categories of institutions—doctorate-granting institutions, comprehensive universities and colleges, liberal arts colleges, two-year colleges and institutions, professional schools and other specialized institutions—based on their functions and missions, using empirical data about characteristics of those institutions. The classifications have been updated nine times since their inception.
In the forthcoming iteration of the classifications, the Carnegie Foundation and ACE plan to create a set of indicators focusing on racial equity and social mobility, which will probably be unveiled sometime next year, the 50th anniversary of the classifications.
“In determining the impact of individual colleges and universities, it is important to consider their success in fostering social and economic mobility for their students,” said Ted Mitchell, president of ACE. “We believe that this next incarnation of the Carnegie Classifications will recognize and encourage a wider range of institutional excellence,” he added.
Tim Knowles, president of the Carnegie Foundation, commented in an interview with Inside Higher Ed, “This is a moment to ask some more fundamental questions about the extent to which the postsecondary sector is addressing some of the big fundamental challenges the nation faces and how the classifications can be leveraged in new and different ways to do that.”
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