Northwestern University to Furlough 250, Tap Endowment for More
(Bloomberg) -- Northwestern University forecast a $90 million budget shortfall due to the coronavirus pandemic and said it will tap more money from its endowment and furlough about 250 staff members.
The school forecast the deficit for the current fiscal year and said the endowment move is aimed at avoiding further budget pressures, according to a letter from university President Morton Schapiro on Monday. The endowment was valued at $10.8 billion as of August.
Universities across the U.S. are facing financial pressure as the virus outbreak has forced them to clear out dorms, cancel on-campus classes and, in some cases, provide students with rebates for room and board.
In addition to the furloughs, which are likely to last through August, the Evanston, Illinois-based school will suspend its 5% automatic contribution and 5% matched contribution to retirement plans through December.
That move “alone will save the university tens of millions of dollars,” according to the letter, which was also signed by Interim Provost Kathleen Hagerty, and Craig Johnson, senior vice president for business and finance.
As part of the belt tightening, Schapiro, Hagerty and Johnson will reduce their pay by at least 20%. University deans will see a 10% cut.
Schapiro also said the school is likely to see a shortfall in fiscal 2021 that’s “as great as or greater than what we are experiencing this year.”
©2020 Bloomberg L.P.