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Dear Lafayette Faculty, Staff, and Students:

I would like to thank each and every one of you for rising to the challenges that confront us as individuals and as a community. Whether you are among the nearly 200 students still living at Lafayette, the employees whose essential on-campus work continues, the faculty and staff who are working remotely to support the College’s mission, or the students dispersed across the country, I am impressed by your commitment to sustaining a sense of purpose and togetherness even under these difficult circumstances.

As you may have read in many news articles, this situation has placed enormous financial pressures on colleges and universities across the country. Lafayette is no exception. While the College’s financial health is strong, that strength does not insulate us from the current economic challenges. It does, however, give us a strong foundation upon which to make adjustments that will allow us to continue delivering our distinctive educational experience in the immediate future and for the long term.

In thinking about how best to manage these financial pressures, all of our decisions are guided by three priorities: sustaining the excellent liberal arts and engineering education for which Lafayette is highly regarded; supporting the faculty and staff who are integral to delivering that education to our students; and preserving the flexibility necessary to adjust to a rapidly changing environment.

These unprecedented circumstances make it difficult to rely on our typical models for predicting outcomes that will affect the College’s finances. Tuition, room and board fees are our largest source of revenue, but it is difficult to know how fall enrollment may be affected by the possibility of continued disruption. Financial aid is already one of the greatest expenses in our budget, and it seems likely that those needs will increase for many families. Our endowment provides significant support for the annual operating budget, so our future capacity to draw on the endowment will be materially impacted by the length and severity of the current downturn. We are in uncharted territory.

After consultation with faculty, staff, and Board leadership, we are taking the actions described below to address the College’s immediate, near-term, and longer-term financial challenges.

Room and Board Refund
Our most pressing issue has been the need to develop a plan for room and board reimbursement for the second half of the spring term. Last week we announced that students who were living in College-owned housing will receive a 50 percent credit of their net room and board charges for the spring semester, with a minimum credit of $1,000 regardless of amount paid. This ensures that students receiving financial aid who did not make out-of-pocket payments for room and board will still receive assistance to help defray food, travel, shipping, or other costs associated with their sudden move home. We also chose to honor full financial aid packages even as we reduced room and board charges for the spring semester. Though this approach represents a significant investment for the College, we believe it meets the goal of being understandable, equitable, and helpful to students and families in a wide range of circumstances.

We are an institution built around people, and the College’s largest expense area is compensation. We hope that taking prompt action in this area will reduce the likelihood of our having to pursue more drastic measures, such as reduced work schedules, pay cuts, or layoffs in the future. Accordingly, and effective immediately, we are instituting a hiring freeze that will be reassessed after October 15. No open staff positions will be filled at this time and no searches will be conducted to fill vacant tenure-track faculty positions for AY 2021-22. Some open faculty lines may be filled with visiting instructors. Also effective immediately, overtime is prohibited without the permission of division heads; vice presidents also have been instructed to limit the use of on-call, temporary employees.

We regret that under these circumstances, there will be no salary increases, including for promotions, or bonuses for the coming year. We know that a 0% increase will be difficult for many in this economic landscape. In recognition of that shared challenge, each of the College’s vice presidents have volunteered to take a 5% pay cut, and I will be taking a 10% cut in my own salary.

Given that we will not be in a position to acknowledge individual performance through merit increases, we are suspending this year’s performance reviews for staff, with the exception of staff who are under formal performance-improvement plans. The Provost has announced that heads and chairs will not be asked to complete faculty salary narratives for this year.

Finally, we will no longer be able to support payments to our custodial and dining vendors that allowed them to pay their employees who were not working during spring break and our first two weeks of remote instruction. That decision, though difficult, is consistent with the actions taken by those firms’ other clients. Those employees will be eligible for unemployment, as they are during the summer and other break periods.

Other Budget Impacts
We are reducing operating expenses by slowing the pace of technology infrastructure spending; reducing expenses for campus landscaping and for printing and mailing; and cutting back on external vendors and contractors, bringing as much work as possible in-house to staff. We also are continuing our suspension of nonessential college-sponsored travel; any travel expenses charged to the College must be approved by division heads. The provost and vice presidents have been asked to identify additional, specific budget reductions that they could make should that become necessary.

Finally, we are taking several steps to improve the College’s liquidity during this volatile time, and are asking donors to consider making unrestricted gifts to the annual fund rather than restricted gifts to the endowment. We are deferring nonessential capital projects as well as delaying the planned renovations to Kunkel Hall and the replacement of the Markle Parking Deck.

It is impossible to know at this time how the impacts of this crisis will affect our ability to grow our financial aid budget by, in part, growing the size of the student body. Though the current shutdown has halted work on the McCartney North mixed-use residential project, it was fortunately ahead of schedule due to the mild winter, and we remain optimistic that the residences, if not the new diner and campus store, will be open in time for the fall semester. We are proceeding with our planning and governmental approvals needed for Phase II of the project, in order to provide the flexibility we will need when it becomes prudent to move ahead with this strategy.

In Conclusion
The environment in which we find ourselves is dynamic and uncertain. Even a rapid return to economic and social normalcy would not eliminate budgetary pressures in the coming years. With the value of our endowment significantly reduced by the current markets, we are likely to experience the financial impact for several years to come.

I ask for your patience and understanding when decisions we make today may need to be revisited in light of changing circumstances. This is a critical moment full of difficult conversations and tough choices. My commitment to you is that we will not shy away from those conversations and decisions. Instead, we will strive to be judicious, collaborative, and decisive in acting to preserve the Lafayette we know today and help strengthen the Lafayette of tomorrow.

Thank you for your commitment to our College and community.

President Alison R. Byerly

Categorized in: Presidential News
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