A new study -- financed by an industry group -- predicts significant losses for universities with large endowments if they sell holdings in fossil fuel companies, as many student and environmental groups are urging. The study was released by the Social Science Research Network and was based on investment models for Columbia, Harvard, New York and Yale Universities, and the Massachusetts Institute of Technology. A key limitation is that the universities don't release enough detail on their endowments to know exactly where they are invested today, so the study is based on proxies using mutual funds. Harvard would lose $100 million a year from divestment, the study says.
A controversial assumption of the study is that it is based on the last 20 years of data for the performance of the oil, gas and coal industries. As the study notes, some believe that these industries will face serious economic challenges due to shifting consumer patterns and government regulation, so historical earnings levels may not in fact be repeated.
The author of the study is Bradford Cornell, formerly a professor of finance at the University of California at Los Angeles and currently a visiting professor at the California Institute of Technology. The study was commissioned and financed by the Independent Petroleum Association of America.
The University of Louisiana and Southern University Systems have settled lawsuits they filed against BP for a very small fraction of what they sought, The New Orleans Advocatereported. The systems sought a total of $274 million but settled for $500,000. The suits alleged damages against the universities related to the 2010 oil spill disaster. University officials said that they accepted a "compromise" because of the concern of state officials about moves that might limit the state of Louisiana's overall share of settlement funds with BP over the oil damage.
University of Iowa faculty members appear to be quite skeptical of Bruce Harreld, a businessman who made it to the finalist round of the school's presidential search. An American Association of University Professors survey released Wednesday found that just 3 percent of surveyed faculty found him qualified to be Iowa's next president.
At least 90 percent of surveyed faculty members believe the other finalists -- including Marvin Krislov, president of Oberlin College; Michael Bernstein, provost of Tulane University; and Joseph Steinmetz, provost at Ohio State University -- are equipped to be Iowa's president.
Harreld, a former IBM executive, visited campus on Tuesday. Iowa's Board of Regents is expected to make a final decision in the search on Thursday.
The College of Saint Rose is planning faculty layoffs and program cuts.
The Albany Times Unionreports the 4,500-student Roman Catholic college has a $9.3 million structural deficit and had a $4 million operating deficit last year, and 70 percent of its property is mortgaged. Now lenders are demanding the college improve its financial situation. "Like many institutions across the country, enrollment at the College of Saint Rose has declined in the past due to market forces and demographic shifts nationally," a college spokeswoman, Lisa Haley Thomson, told the Times Union. "Therefore, the college is beginning the necessary process of prioritizing its academic offerings."
Ten years after Hurricane Katrina, colleges and universities in and around New Orleans continue to suffer from weak enrollment, according to a Moody's analysis released this week.
The damage incurred during Katrina caused institutions to shutter for the entire fall 2005 semester. Today those colleges and universities continue to struggle with enrollment -- which is down 15 percent from pre-Katrina levels -- due to demographic declines and persistently weak state funding for public universities, Moody's found. Five of the region's eight institutions have experienced enrollment declines.
Moody's notes that colleges and universities had to manage plummeting revenues while paying for cleanup and recovery costs. While the federal government assumed some of the recovery and facility replacement costs, the pace of reimbursement posed liquidity challenges, Moody's reported. And some Katrina-related expense submissions are still under federal review 10 years later.
Nearly $30 million in federal financial aid awarded to Cheyney University -- a public, historically black institution in Pennsylvania -- is in question after an internal review found at least one error in 85 percent of its records for federal grants between fiscal 2012 and fiscal 2014. The Pennsylvania State System of Higher Education last year hired the independent firm Financial Aid Services (FAS) to reconcile Cheyney’s federal financial aid programs after it determined Cheyney hadn't performed the required reconciliation internally for those three years.
The U.S. Department of Education is reviewing the FAS report and will decide whether Cheyney will have to repay some or all of the funds it didn't administer properly. In the meantime, FAS is administering Cheyney's federal financial aid programs.
The report is damaging for Cheyney, an institution that's struggling with steep enrollment declines and a budget deficit that grows larger each year. "This report brings to light the deficiencies of many enrollment management functions, the university’s policies and procedures, communications, academic progress, student accounts, student records, financial records, and student information management systems resulting in overall findings of noncompliance with federal regulations for the administration and delivery of federal student aid totaling $29.6 million over three years," an executive summary of the report said.