When the Vassar Bubble Pops, What Then?

Photograph courtesy of Monica d. Church, 2016
Photograph courtesy of Monica d. Church, 2016

First, the good news: Vassar’s endowment in 2015 reached an all-time high, closing the fiscal year with a market value of $983 million.[1]  Our college is now almost as wealthy as the least of the nation’s 600 richest individuals. With one billion tax-exempt dollars to invest, Vassar can spend freely—on books and computers and salaries; on financial-aid and student activities; on construction (and demolition) projects— without fear of going broke.  Or so it would seem.

The not-so-good news:  Vassar’s financial officers and fund managers invest entirely too much of our endowment in military contractors, major polluters, and fossil fuels. Example: from 1 July 2013 to 30 June 2015, Vassar’s illiquid holdings in Real Estate, Oil, and Gas Partnerships plummeted by $10.9 million, as registered by year-end market valuations.[2] The Controller’s office has declined to disclose how much is invested in each of the three sectors.[3]  But since our Real Estate units were up an estimated 51% during the same two-year period, unrealized losses on the College’s Oil and Gas partnerships may be in the range of $25 million or more, with no rebound in sight.  Clearly, the Administration’s dogged commitment to fossil fuels is bad not only for the Earth, but for the college and its mission.

Even worse news:  Relative to our peers, the whole endowment is thriving less well than President Hill has led us to believe.  Those clouds on the horizon are not rosy, but gray.  A storm is brewing.

Vassar is no longer one of the 50 wealthiest institutions of higher learning in North America (as it was when I arrived as a new Ph.D., thirty years ago).  Nor are we in the top 60, or top 70, or top 80, or top 90.  In 2012/13, Vassar fell to the 91st slot; in 2013/14, to 94th.  In 2014/15, we fell to 99th, five schools passing us by in a single year, despite escalated layoffs of staff.[4]   When the numbers come in for 2016, we are likely to discover that Vassar for the first time in its 155-year history is no longer numbered among the 100 richest colleges.  Meanwhile, Cappy is like the optimist who falls from a skyscraper and calls out, on the way down:  “So far, not bad at all!”

Good news: Our alumni are more generous than ever:  charitable donations to Vassar have gone up. 

Not so good.  So has the sticker price.  During President Hill’s 11-year tenure, the Consumer Price Index has risen by 15% while Vassar’s tuition and fees jumped 42%.  Vassar now has the single highest tuition in America, having finally bumped pricey Sarah Lawrence into 2nd place.

So what else is up?  Our long-term debt, for one.  When Cappy Hill became president, Vassar carried less than $77 million in long-term debt.[5]  Hill in her single first year increased that figure by 63% to $125.5 million.  By 2013, the college’s long-term debt hit $254.6 million.[6]  (The Science Bridge alone, from the initial clear-cut of old-growth timber, to the grand opening, cost an estimated $125 million.)

Also up: administration and management.  For the five years preceding 2006/7, Vassar’s spending on administration was in a gentle downtrend.  Conversely, spending on instruction from 1986/7 to 2006/7 saw a long, steady, unbroken increase.  We cannot blame our woes thereafter on the 2007/8 financial crisis:  all colleges lived through that.  What went wrong, quite simply, is that Vassar’s historic priorities were turned topsy-turvy.  President Hill during her first two years as Vassar’s CEO doubled her spending on management (while also doubling our long-term debt).[7] Her newly invented deanships, and associate deanships, and assistant deanships—with inflated administrative “compensation” for every one of them—added up like anchors on the swimmer’s back.  (Does anyone in academia really need to be paid $200,000 a year? Or $800 thousand a year, plus country club memberships?  There are other rewards for a career in education besides getting rich on someone else’s charitable contributions.)

The spike in administrative spending for those first two Hill years leveled off, by necessity—the increases were unsustainable—with one notable exception:  Cappy Hill’s annual compensation continued to soar, rising 73% from FY2007 ($411,536) to FY2014 ($712,739), with presumed additional increases for FY2015 and 2016.  President Fergusson took nothing for a personal expense account.[8]  President Hill at her appointment negotiated a personal expense account of $3,000; a benefit that was increased, during her first year in control of the budget, to $23,600.[9]

With management expenditures hitting the roof, here’s what got whacked to keep them there: instruction.  Adjusted for inflation (and pay hikes notwithstanding), Vassar today spends less on education, our raison d’être, than it did ten years ago.   You cannot have a top-heavy administra­tion and still have a robust budget for education.  Among our self-identified peer group of 21 liberal arts colleges, Vassar’s “per student” figure for the amount spent on classroom instruction, is now dead last (Table 3).

In FY2014 (the latest year for which metrics are available), Vassar’s instructional budget was $145 million.[10]  But if a “good education” is to be measured in dollars, then some Vassar students (the ones with wealthy parents) are now paying for a BMW and getting a Ford Focus.  Take one college from each Coast:  In 1998, Vassar’s endowment was slightly less than Pomona’s and a bit greater than Amherst’s.[11]  By 2014, both Amherst and Pomona had twice Vassar’s endowment; and because our student body has grown, Vassar would now have to triple its wealth to have the same endowment-per-student as they do.[12]  (Got $2 billion under your mattress?)  Nor can we match what our peer colleges spend on classroom instruction, without an additional $80 million a year in revenue—or $80 million in annual cuts somewhere else, as from administration salaries, and that’s just not going to happen; or at least, not under the Hill administration:


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From 1986, Fran Fergusson (President) and Nancy Dye (Dean of the Faculty) increased Vassar’s global stature by raising faculty salaries, supporting research, and recruiting distinguished scholars who were also great teachers. Cappy Hill and Jonathan Chenette have done the reverse:  faculty salaries and funding for research now lag significantly behind our peers.  Social promotion has largely taken the place of scholarly achievement. (Plus, there’s always some vacant administrative position available to those unpromoted faculty who don’t publish or have poor CEQs.)  The faculty has been reduced in size.  Few replacements are made when profs retire.  And when new hires are permitted, academic departments are having trouble landing their first-choice candidates: young A-list scholars are finding greener pastures elsewhere, with better pay, better benefits, and a more manageable work-load than at Vassar, even though we have better students.

In the past ten years, the English department (for one) has been cut in half.  What keeps us going is our love for Vassar’s past, our faith in Vassar’s future, and a widely shared conviction that our undergraduates are simply the best.  Teaching at Vassar College is a joy.  Our students are smart, inventive, artsy, well-read, somewhat diverse (we could do better), and fully engaged.  In that respect, we’re doing just fine, relative to our peers.  And here’s one big reason why we snag so many of the very best high-school grads:  Vassar is more generous with sticker-price discounts than other schools:  In FY2014 we expended $57.9 million in financial aid discounts; Amherst, $49.5 million; and Pomona, $34.5 million.  President Hill deserves some credit for making Vassar College affordable to many top students who lack top income.

Financial aid is money well spent: it works. (Look at what great students we’ve got!)  But unless cuts are made elsewhere, the largesse cannot hold out much longer.  Nor is financial aid strictly about generosity. A college in decline must spend ever-greater sums on financial aid to woo the best students (like yourselves) away from the competition.  The downside is that, when the students arrive, we have much less money to spend upon classroom instruction (reduced curriculum, bracketed courses, fewer faculty, lower salaries, fewer A-list scholars, bigger enrollments).

It may already be too late for Vassar to catch up with colleges we rightly called our “peers” as recently as ten years ago.  We’re like a struggling theater, telling private high-school kids: “Don’t go to those other $65k theaters, come to ours, and we’ll take $40k off your ticket!”—and when they get inside, our clients don’t see the Supermax 3-D blockbuster that they were expecting (like the one that’s showing at those other $65k theaters); instead we give them a small-screen re-run, as much as we can now afford.  Or, to put it another way:  Our senior officers are like the prodigal son who inherited his parents’ store; hired a dozen new managers at astonishing salaries; fired much of the help; built a new store-front with borrowed money; increased advertising expenses; slashed prices with generous discounts; brought in a big crowd of intelligent young customers, and then announced the establishment’s new motto:  “We lose money on every sale, but we make up for it, in volume…”

Here’s where we stood in FY2014 (the last year of record, and trending stormward):  among literally hundreds of liberal arts colleges in North America, only two (Amherst and Middlebury) now spend more on administration than Vassar College. And only one (Middlebury) has a worse ratio for instruction-to- management. For every $1,000 spent on instruction, Williams College (for example) spends $219; Wesleyan, $172; Smith, $158; Colgate, $122; Pomona, $83; Union, $61; and Vassar College, $537.[13]  That’s no way to run an elite college; it’s the way to run it into the ground.   And our Instruction-to-Administration ratio is even worse than it appears:  many teachers are pulled from the classroom to perform administrative services; while an undisclosed portion of senior officers’ bloated salaries each year is charged to the instruction budget.

From Hill’s first to her seventh year as president, private donations to Vassar increased by 16%, keeping pace with inflation, so that’s good. But the amount spent on fund-raising activities (not charged to management) increased by 48%. Today, just one liberal arts college (Wellesley) spends more money, to raise money, than Vassar.  The swelling ranks of our Develop­ment/AAVC staff (60) now outnumber our Assistant Professors, Instructors, and Lectur­ers combined (48).  And yet, without so many devoted personnel working the telephones to gather donations, we’d really be in a pickle.

Vassar is now moving to diminish classroom instruction even further, with a scheme to reduce faculty teaching-load (a good thing) without adding new faculty (a bad thing). Under the new plan, described euphemistically as a Proposal for Rebalancing the Curriculum, “The overall regular classroom curriculum shrinks by around 15%” without having to make painful cuts elsewhere, as from the college’s administrative bloat.[14]  Students will simply take fewer courses.  No longer will anyone be permitted to take more than 4.0 units per semester.  Field work and various non-classroom activities will count for academic credit.  Fewer credits will be required for graduation.  Less homework will in turn relieve “the persistent student experience of overload.”  Students and faculty together will have “the time, opportunity, and mental space for exploring new ideas and for engaging the talents and passions.”[15]   A final vote on the reduced curriculum will be taken when the faculty reconvene in September.

Comprehensive fees for 2016/17 will, of course, be increased to another all-time high.

Robin Hood is one of my heroes.  Bernie Sanders, too.  But the Rob-Peter-to-Pay-Paul method of tuition-discounting works only so long as Peter is content to play Santa.  With Vassar already claiming the nation’s highest tuition while over-charging for classroom instruction, recruitment has become a challenge.  The slow erosion of full-pay students requires more aggressive fund-raising, sharper cuts, more layoffs, fewer new hires, more financial aid, and ever-greater hypocrisy concerning our so-called “need-blind” admission. (Unfortunate fact: the Admissions Office gives first priority to private high-school students, wealthy Zip-codes, and full-pay international students, a strategy that, compared to the 1990s, has largely excluded US-born Black and Hispanic Americans from the student body.)

Vassar is still a great college—for my money, among the best anywhere.  And we’re still a wealthy college. If faculty, staff, students, and alumni collaborate, we can surely get through this rocky stretch, and thrive. As a loyal Vassar old-timer, I take great hope in the late resurgence of student activism on campus.  The Fossil Fuel Divestment Campaign.  Both sides in the BDS campaign.  The courage of the VSA in resisting tyranny.  Student efforts to prevent abusive speech, gender discrimination, racism, Islamophobia, and campus sexual assault. Boilerplate Magazine. VC Habitat for Humanity, Amnesty International, the BSU, Challah, Choice, Democracy Matters, and many more.  We do have a future to believe in, and Vassar students are the Brewers of that bright tomorrow.

But if, in the meantime, there should be another down-turn in the economy—or if full-pay parents conclude that Vassar is no longer a bargain—or if our donors decide that their gifts are not being well-spent—or if New York’s public universities become tuition-free… What then?  When a sparkling, top-heavy, crystal chandelier is hanging by a frayed wire, you fix what’s wrong, up top.  Or sit silently by, and look out below.

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tbl 3

Source: 2014 IRS Form 990 and Common Data Set for each institution



[1] Vassar College, “Audited Financial Statements,” Fiscal Year 2015,  p. 18.

[2] Vassar College, “Annual Report, Fiscal Year 2013, p.11;  “Audited Financial Statements,” Fiscal Year 2015,  p. 14.

[3] Stephen Dahnert, Associate VP for Financial Services, to D. Foster (2-3 May 2016).

[4] NACUBO, <www.nacubo.org/Documents/EndowmentFiles/2013NCSEEndowmentMarket%20ValuesRevisedFeb142014.pdf>; <www.nacubo.org/Documents/EndowmentFiles/2014_Endowment_Market_Values_Revised2.27.15.pdf>; <www.nacubo.org/Documents/EndowmentFiles/2015_NCSE_Endowment_Market_Values.pdf>.

[5] Vassar College, “2006 Financial Report,” p. 21;  “2007 Financial Report,” p. 14.

[6] Vassar College, “Audited Financial Statements,” FY2013, p. 2.

[7] Vassar College, IRS FORM 990, Section 1, parts 1-3, Administration expenditures:  $20.2 Million (2002/3); $21.7 M (2003/4); $19.3 M (2004/5); $19.1 M (2005/6); $18.9 M (2006/7, still on Fergusson budget); $26.3M (2007/8, Hill’s first budget); $37.7 M. (2008/9), etc., with continuing increases $39.4M (20013/14).

[8] Vassar College, IRS Form 990 IV.V (FY 2006), p. 23.

[9] Vassar College, IRS Form 990 IV.A (FY 2007), p. 29 (also pt.II, line 25A);  IV (FY 2008), p. 26.

[10] Vassar College, IRS Form 990 (FY 2014), sec. 1, pt. 3.

[11] In thousands, Vassar College, $554,974k; Pomona College, $675.1k; and NACUBO Endowment Study, 1998.

[12] Vassar, $982,974 k; Pomona, $2,098,704 k; Amherst $2,193,511 k. NACUBO Endowment Study, 2015.  FTE student population from the Common Data Set for each college; instruction budget from IRS Form 990.

[13] Numbers supplied by IRS Form 990 for each college.

[14] Vassar College, “Proposal on Rebalancing the Curriculum and the Teaching Load (2-2-1)” (April 2016); second reading and faculty vote scheduled for 16 May 2016.

[15] Ibid.


  • Lisa says:

    Thank you for the information. What can we alumni do to help rectify this situation? It seems unsustainable. And wrong.

  • Steve Koval says:

    Foster is great at making defamatory statements. Maybe Vassar should sue him too. See below. Foster accused this man of the anthrax attacks in 2001. The case was settled by Condé Nast in 2007 for an undisclosed amount. Foster ceased any public discussion of the case.


  • Partha Mazumdar '91 says:

    I was trying to recreate Table 3, and I think the numbers are wrong. Wrong to the point of invalidating the entire argument of the article.

    You cite “Source: 2014 IRS Form 990 and Common Data Set for each institution” but I wonder why you would do that considering that, for Vassar, you use the annual Audited Financial Statement. Why not use the other’s colleges’ audited financial statement, too? We should compare apples to apples, no? Audited financial statements public and google-able.

    So, for, say, Amherst (https://www.amherst.edu/system/files/2015%2520Annual%2520Report_0.pdf) we get that it spent $40,244,000 on instruction in 2015. Taking that they have 1785 students (from Table 3), we see that it spent $22.5k on instruction not the $60.4k that you list. This is quite a difference. And it’s true of all the colleges listed in Table 3.

    And, considering that $22.5k less than the $29.6k listed for Vassar, and the whole point of the article is the diverting of money away from instruction relative to other schools, these errors make the entire argument moot.

  • Sad Hugh Mann says:

    Struggled for equal rights? Not if you’re suffering from a mental illness and are withdrawing from his class. Expect lawsuit-worthy condescension.

  • 2001 says:

    I liked VC much better under Fran, who cared about the humanities (the library, drama, ART!). This one is constantly in the news self-aggrandizing about her concern for equality and affordability of higher Ed while her salary doubles? Now breaking a promise to see the year out to jump into an even more lucrative endeavor? We should have let Williams keep her.

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