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January 2009
Applications Up 3 Percent; 18.6% Expected Acceptance Rate
In an email to CAAAN volunteers, the admissions office has provided an early glimpse at the total number of undergraduate applications to Cornell this year. While not all of applications may have been processed yet, Cornell has received roughly 34,200 applications to date for the Class of 2013, which reflects a net gain of ~1100 applications, or roughly a three percent increase over the 33,073 received last year. This increase if fairly comparable to increases seen at other competitive schools across the country. Princeton saw a two percent increase, while Dartmouth realized a nine percent increase. Keep in mind that because Cornell has already such a large amount of students applying every year -- roughly twice the number of students as Dartmouth, for instance -- the same absolute increase in applications results in a lower percentage increase. But based on these numbers MetaEzra can continue our long standing tradition of projecting the acceptance rate for the Class of 2013. And provided the school doesn't increase the target size for the freshman class above 3,050 students, Cornell is going to drop below 20 percent for the first time in history, with an expected acceptance rate of 18.6 percent. The main reason for this decline is Cornell's increased reliance on early decision this year, as 1250 students were accepted early -- over 100 more ED admits than the previous historical high. So there are only 1800 spots left among the regular applicant pool, to which 30,800 students applied. And assuming a regular decision yield rate of 35 percent (last year this number stood at 36 percent), only 5,150 students will have to be admitted to fill the class, compared to 5,700 last year. Expect the regular decision acceptance rate to be around 16.5 percent. Of course, this could all change if the University decides to enroll more students this year to combat budgetary pressures (although I suspect that will more likely occur among transfer applicants). And we already know that acceptance rates really tell you nothing. Matthew Nagowski | January 31, 2009 (#) Outfitting Ithaca's Urbanism Sometimes it is hard to separate the forest from the trees. Consider the recent news that Urban Outfitters will be setting up shop in downtown Ithaca: “It’s an awful idea,” he said. “It will ruin the atmosphere of the Commons. Right now downtown is a rustic, local place with a lot of character. Urban Outfitters is a big corporate chain, and it will completely change that.” I suppose the Commons is quaint, but there are already two big corporate chains downtown -- the Holiday Inn and the Hilton -- and nobody seems to complain about the hotels, not to mention the Starbucks associated with the Seneca Place development. But I actually think that the arrival of Urban Outfitters is fantastic news, if only because it will drive more students to the Commons, getting them outside of the Cornell bubble. The one-way Green Street is a bit less ideal than the Commons proper, but the mock-ups show that there will be easier access to the Commons now that the parking garage has been relocated. Plus there will be a new movie house across the street. And more foot traffic to the Commons will mean that downtown Ithaca can start to offer the types of retail outlets -- drug stores and grocers -- that can make the area a viable retail district again, including all of those funky shops that Ithacans know and love. And reinvigorating downtown Ithaca can only help to attract more people to Cornell and Ithaca, bolstering the only economic bright spot Upstate. I love this quote though: “The reason I liked Yale so much is because there was an Urban Outfitters right in town,” Brooke Flohr ’12 said. “Now I have no regrets left about coming to Cornell.” I'm glad that Yale's educational offerings weren't part of Brooke's decision making. Matthew Nagowski | January 30, 2009 (#) Has MetaEzra Jumped the Shark? MetaEzra reader MP writes in to ask whether or not my earlier allusion to the Great Depression was unfair when trying to understand the difficult decisions that Day Hall is grappling with these days: But I am pretty certain the only thing that has jumped the shark has been the American economy. When economists across the country are claiming that this is the greatest economic downturn since the Great Depression, I think that looking at what type of environment the University faced in the 1930s is completely appropriate. And all I maintained in the post is that the tough decisions of today are not unlike what was faced eighty years ago. I never suggested that the times should be exactly comparable. So the comparison is completely apt. I don't think I am the only one concerned about the "deep structural rot" in the American economy and the effect that this will have on our institutions of higher education as they struggle to maintain adequate cashflows. But I've been worried about these things for a while, as evidenced by my thoughts on college tuition and the credit crisis from last spring. What's truly unfortunate about the current situation is that higher education is uniquely suited to provide the innovation and resourcefulness needed to lead the economy in such dire times. As David Skorton has argued, the long-term economic benefits to higher education are astounding. The physical and applied sciences offer future efficiencies and technological advances. The social sciences improve our policy-making abilities, shunning politics for informed decisions. And the humanities inform our own mortal condition, allowing us to better endure the highs and lows of life on this planet and lead future generations to a better future. Besides, the gigolo story was just too good to pass up. Matthew Nagowski | January 29, 2009 (#) A Tale of Two Endowments We get some more details on the state of the University's endowment in a new Chronicle article. The investment team is currently sitting on over $400 MM in cash, and also has made some bold investment moves in putting some money into "specialist credit" and "distressed debt managers". Put another way, the endowment is purchasing a lot of the very same toxic mortgages -- at a deep discount -- that have caused the problems that the world economy is currently experiencing. Given the uncertainty abound in today's economy, it's a risky move, and not for the faint of heart. Cornell's endowment managers have been taking several measures to safeguard assets and leverage market opportunities. As the financial markets began to weaken in the fall, they significantly reduced the endowment's exposure to equities and commodities, resulting in a cash position of around 10 percent at the start of 2009. This not only slowed the decline of the endowment's value as the market weakened, it also provided money to increase investments in specialist credit and in distress debt managers. We also hear the repeated mantra that Cornell depends a lot less on its endowment than other schools, as we noted a couple of months ago. So let's flesh that out a little bit more: All told, Cornell expected around $310 MM in revenues from investment income this year, or around 5.5 percent of its $5.5 billion endowment and around 11 percent of its $2.9 billion budget. A 30 percent decline in investment income would therefore be associated with a revenue hit of ~ $100MM, or around 3.5 percent of its operating budget. By contrast, a school like Princeton has a budget of $1.3 billion, of which half -- $650 MM (!!) -- comes from investment income. A 30 percent decline in investment income would therefore be associated with a revenue hit of ~ $215 MM, or around 17 percent of its operating budget. The difference maker, though, is that Princeton can afford to eat into its endowment -- as both schools are currently doing -- for a longer period of time. At its peak, Princeton's endowment was sixteen times its annual operating budget, while Cornell may have reach a multiple of 2. Of course, though, Princeton should really be asking itself what value it has gotten out of all of its endowment money. Cornell -- despite being one third as rich as Princeton -- has been able to educate more students in more disciplines while conducting more research than Princeton. And that's something we should all be proud of. Matthew Nagowski | January 28, 2009 (#) Philosophical Gigolos: Cornell During the Great Depression Morris Bishop's A History of Cornell informs that the campus experiences eighty years ago were not unlike the tough decisions facing Day Hall today. Interestingly, the contract colleges appeared to be a little bit more stable than the endowed colleges during the Depression. Not so today: On the whole the faculty was philosophical about it. We had heard of diminutions of 40 per cent in other institutions of higher learning. The cost of living had somewhat receded, while we had enjoyed a lag of nearly four years since the coming of the depression. And at least, unlike many of our previously opulent classmates in business, we had jobs. (466) And a story about students tenting it may not be so novel. I remember a similar story of a student living in a tarp near Fall Creek (although perhaps not due to economic necessity) when I arrived on East Hill in the fall of 2001. But reports of a male gigolo are altogether amusing: The depression, officially inaugurated by Black Friday on the stock market, 29 October 1929, was not immediately felt in our seclusion. Bus as businesses contracted and failed, as parents found themselves jobless, as remittances dwindled, hardship came to campus. Within a year our loan funds were severely taxed. Graduating seniors had great trouble finding employers, the architects and Bachelors of Arts being worst put to it. In October 1932 it was reported that student jobs providing room and board were all taken by juniors and seniors, and that five hundred working students could find no work to do. One student was a professional dancer, nay rather a gigolo. Others worked as meatcutters, plumbers, painters, decorators. One was a tailor, one did embroidery, one gave religious talks. Four Russians formed a vocal quartet. Two boys lived in a tent by Six Mile Creek.< (491) And the athletics program took a hit as well: Then came the crisis. The Athletics Council, appalled by deficits, decided on January 1933 to discontinue all varsity games except basketball and some wrestling matches and to cut the salaries of staff and coached. (505) Matthew Nagowski | January 25, 2009 (#) Trustees Approve Plan To Start Eating Into Endowment Per the latest announcement from David Skorton, the University's financial situation -- just like the rest of the nation's economy -- will continue to be bleak. Fortunately, Cornell has a cushion of funding in its endowment that it can rely on in times like this. Unfortunately, Cornell's endowment has likely lost over thirty percent of its value in the past year. From Skorton: As I mentioned in my message to the campus on December 16, 2008, we are facing a 10 percent budget shortfall caused by a combination of reduced state funding, a structural deficit in our operating budget, the loss of 27 percent in our endowment over the past six months and a decline in philanthropic gifts. Prompt correction is necessary to confront a persistent negative financial outlook sweeping the entire higher education sector. All told, the Trustees have approved a $185 MM draw from the endowment to support the University's revenue stream over the next year -- $150 MM for general purposes and $35 MM explicitly for financial aid. Other highlights include: -- A ten percent ("voluntary") reduction in Skorton's pay... exactly like we proposed two months ago. -- A pay freeze for all employees, coupled with a smartly designed one-time bonus for staff making less than $40k a year. -- Continued hiring and construction freeze on campus. -- A tuition increase of 4 percent for the endowed schools, and a 7.2 percent increase for the contract schools. Notably, there is now no discount given to out-of-state students in the contract colleges. -- A 5 percent ($50 MM) budget cut in general expenses out of the Ithaca campus and an 8 percent ($15 MM) budget cut in general expenses at Weill-Cornell. All told, this amounts to reasonable and prudent action. And it doesn't amount to eating one's seed corn... yet. It will be interesting to see if the University will attempt to raise any revenues through a bond offering, as Harvard and Princeton have both done in recent weeks. Matthew Nagowski | January 25, 2009 (#) Deep Thought I wonder if Sandy is going to be making any more donations to the University or his Medical College anytime soon. Matthew Nagowski | January 22, 2009 (#) Big Red Becoming the Big Ten? Longtime readers will undoubtedly remember my opinion that Cornell might be better served in the Big Ten as an athletic conference due to Cornell's democratic character and historical linkages to institutions such as Michigan and Iowa. So imagine my pleasant surprise when Isaac Kramnick channels the same meme in the latest edition of the Cornell Alumni Magazine: Speaking of athletic leagues, has anybody else noticed how red hot the Big Red teams are this winter? You would think that we are a Big Ten institution and not in the wimpy ol' Ancient Eight. -- Wrestling is currently ranked No. 2 in the nation entering its Ivy season. At the national duals last weekend, they beat out then ranked No. 2 Iowa State before losing to Iowa in the finals. The State of Iowa takes its wrestling very seriously, so this was no easy feat. Look for Cornell to produce a national champion or two to complement the one earned last year by Jordan Leen '09, and maybe even make a run for the national championship as a team. -- The defending Ivy League basketball champs are attempting to run 14-0 again, already besting Columbia to start Ivy play. The preseason favorites increased the quality of their out of conference opponents this year, including the likes of Minnesota and St. John's, so hopefully they won't suffer the same embarrassing fate they encountered last year when playing Stanford in the first round of the NCAA tournament. Of course, let's not count our chickens before they hatch -- they still need to best the Quakers of Pennsylvania, a perennial power, as well as upstart Harvard. Harvard made some waves by beating Boston College (which had knocked around national championship contender UNC) but subsequently was only able to beat Ivy laggard Dartmouth by one point. The best thing about this Cornell team is that we still have Jeff Foote, Louis Dale, and Ryan Wittman to play for us next year. In fact, this basketball team is becoming so good even Kentucky Wildcats want to play for us! -- And let's not forget Big Red Hockey, which is having its most exciting season since 2006 -- way too long for the Lynah Faithful among us. The No. 3 Red are currently earning first place votes in the weekly polls, and are being led by a red hot goaltender in Ben Scrivens '10. He has already had five shutouts this season, and is being talked about as a possible pick for the Hobey Baker award for the best player in college hockey. There's still a number of games to play down the ECAC stretch, and the Ivy title isn't in the bag yet despite wins against Dartmouth, defending champion Princeton, and hated Harvard. But by all accounts we should make it to Albany and the NCAA tournament this year. And depending on who you listen to on the Internets, we may just be the number one seed for the tournament if our play continues at its current pace. There's also the ever-dominant track team, not to mention the fact that lacrosse season starts in just a few short weeks, and Cornell ranked No. 6 in a preseason poll! Matthew Nagowski | January 21, 2009 (#) Information Overload: Sun Back in Print The kids at the Sun celebrated Martin Luther King Day and the first day of classes by going back into full-swing operations today, and in doing so are running a couple of great articles. First, we thankfully learn that the Madoff ponzi scheme hasn't affected Cornell in the slightest. The 27 percent drop in the endowment could always be worse! While Cornell’s investments were left unaffected by Madoff, other universities were not so fortunate. Yeshiva University, New York University and Tufts University were a few of the institutions of higher education injured by the fraud. Then we read about how the contract colleges are dealing with the state budget cuts. CALS and the Vet School appear to be harder hit then HumEc and ILR, but notably, ILR is going to have to lay off a lot of workers in its extension program. It's unclear as to whether or not the entire extension program will be shut down, or just significantly curtailed. The veterinary college has had to lay off staff, defer new hires, decrease equipment and supply budgets and stop programs. Dean of the College of Industrial and Labor Relations Harry Katz said that his college will lay off 17 professionals of ILR’s extension program by June of 2009. Finally, we have an interesting interview with Doris Davis that seems to contradict some of our earlier reporting on the admissions front. Davis maintains that the ED admit size was no different than earlier years and that the recent financial aid initiative will not explicitly target athletes, among other students: Sun: This year’s early decision class, in addition to having a record number of applicants, also saw an increasing percentage of the class admitted early. Why was this? Regarding ED enrollments, Davis actually ends up directly contradicting a table in the Sun. But I suppose it's possible that the University will expand enrollment this year to increase revenues. And in regards to athletic recruiting, she skirted the issue by not directly alluding to the financial aid packages for middle income families that will only be granted to certain students. Interesting. Matthew Nagowski | January 19, 2009 (#) Mechanics Move Foreshadows Future Changes on East Hill Our Bucharest bureau recently wrote in to direct our attention to last week's Inside Higher Education article on the consolidation of the Department of Theoretical and Applied Mechanics at Cornell. We had noted the announcement a couple weeks ago in the sidebar, but the IHE article goes into a little bit more detail: “The primary move is looking at what our priorities will be for the future,” he said. The college aims to invest in its mechanical and aerospace programs, in part by adding faculty slots to those areas when TAM faculty leave or retire over time, Fuchs said.” Interestingly, two of Cornell's most noted individuals have been associated with the Mechanics department -- Steven Strogatz, an authority on chaos and synchronous order who wrote the prize-winning book Sync, and Duncan Watts, who earned his PhD at Cornell before going on to be a professor of sociology at Columbia, famed for his work on networks and small world effects. Fuchs tries to explain why the move isn't due to cost cutting, and why the decision stands on its own laurels, but I have a hard time believing the argument, especially with such a specious assertion as "Cornell is the last of the top-ranked colleges of engineering to maintain a TAM department." (Okay, but how many of those non-existent departments have had people of Watts or Strogatz's caliber? None.) For those interested, some engineers have made the case for TAMs continual existence on this blog, where it is suggested that Fuchs never actually understood how valuable TAM has been to Cornell. At the same time, one MetaEzra confidant, an '06 Engineering alum who is currently pursuing his PhD in engineering at Michigan had the following to say: TAM doesn't have any undergrads and the distinction between studying applied math in the math department, or OR department, or this department for graduate work is subtle. I always thought of TAM as a interdisciplinary program cause they seem to have a lot of overlap with Mechanical, Aerospace, and other areas of engineering. So it may really be water off of a duck's back in the grand scheme of things. But what's done is done, and I think what we can take away from the experience is that the Cornell administration will not be afraid to reorganize departments and alter funding lines against political considerations. And David Skorton has suggested back in the fall that he is eager to start cutting through the Big Red tape. With this in mind, what other academic departments might be up for possible merger, consolidation, or even elimination across the university? Matthew Nagowski | January 17, 2009 (#) Budget to Be Cut by Five Percent, Endowment Losses Likely Larger than 27 Percent Bloomberg News has released a follow-up article to the earlier news that Cornell's endowment has fallen by 27 percent in the last six months. In the article, not only do we learn that Skorton has enacted across the board budget cuts to the tune of five percent last year, but that we can expect further budget cuts down the road. “We’re throttling back our expenditures,” Skorton said in an interview today in New York. “We’re going to need a 10 percent correction in our budget in the next three to five years,” which will be achieved through increased revenue and reduced spending. If you recall, back in the fall I asserted that it would be a blessing if Cornell could scrape by this downturn with anything less than a 15 percent reduction in operating costs. Skorton appears to be treading carefully for now, attempting to limit the pain as much as possible, but we will see what the next year brings. That said, I'd be really interested to hear how Skorton plans to increase revenue over the next couple of years. Perhaps additional and much needed funding for basic research will come from the federal government, but I don't see additional revenues coming from the state, private gifts, or tuition increases coming anytime soon, especially with the expensive new financial aid plan that was announced in November, not to mention the broken state of the private student loan market which provides a lot of the funding for professional students. One option that's still on the table would be to start accepting more transfer students. Perhaps Cornell's undergraduate enrollment will tap 14,000 in the coming years? Perhaps Cornell can raise revenues by taking out some debt -- Princeton just announced a $750 million bond offering. But, frankly, this nation needs to get away from debt, not turn more to it. The other big news is that a full third of Cornell's endowment is held in private equity and real estate, and that losses in these less-liquid assets have yet to be realized. I'm certain that this is par for the course at most endowments Cornell’s second-half loss doesn’t include returns from hard-to-sell holdings in real estate and private equity, which account for a third of the fund. Values for those assets have yet to be updated, Skorton said. The Standard & Poor’s 500 Index fell 28 percent, including dividends, in the second half of last year. So if we assume that the private equity and real estate holdings have taken a thirty percent haircut over the last year -- perhaps aggressive but not unreasonable -- that means that there has been an additional 11 percent decline in the endowment. Bringing the total losses likely closer to 38 percent, not 27 percent. Gulp. Matthew Nagowski | January 13, 2009 (#) Cornell Endowment Declines with Industry Cornell Alumni Magazine has the scoop of the month, reporting that Cornell's endowment fell 27 percent from June month-end to year-end. Reports CAM: Skorton noted that Cornell’s operating budget is not as dependent on endowment earnings as that of some other institutions and expressed great confidence in the University’s financial managers and trustees as they deal with the current economic crisis. It's important to note that this decline has not only mirrored that of the largest endowments --- Harvard, Yale, and Princeton -- but also schools with more Cornell-sized endowments. WUSTL has seen a 25 percent decline. And Duke's endowment has lost 20 percent as of the beginning of December. Expect similar declines at schools like Chicago, Northwestern, Hopkins, and Dartmouth. Of course, it could always be worse. The S&P 500 is down 30 percent over the same period, while commodities like oil are down over 75 percent. If you recall, two years ago when we reported that Cornell's fiscal situation is "strong and strengthening", the new CIO, relatively underpaid James Walsh, was quoted as saying, “commodities are especially effective at diversifying a fund’s investments and counterbalancing equity volatility", so thankfully the entire endowment doesn't seem to be in the non-volatile energy market. Skorton also correctly notes that Cornell is relatively sheltered to changes in its investment income. As we noted two months ago, some schools, like Dartmouth, lean on their endowment much more heavily for their operating revenues. Here's to 2009 not being as bad as 2008. Matthew Nagowski | January 13, 2009 (#) MetaEzra Announces Winners of Holiday Haiku Contest Three weeks ago we launched a holiday contest, encouraging readers to submit their Cornell-themed winter/holiday haiku. And I'm pleased to announce that we have a tie! Two great haikus for the price of one. First, Becky Sopchak '08 evokes the lonely, wind-chilled feeling of a late December afternoon on the Arts Quad: students gone, vacant quad. But still, "Our Fair Cornell." Meanwhile, Jenn Frohlich '06, finds some creative use in the nickname for Cornell athletics: Transforming Big Red to White Bells chime, time for sleep And below is my own humble submission, which of course was excluded from consideration. the ice is warm and glistens with blue sun, and hope. I still have yet to decide what the winners will receive, but I suspect that it will be something Cornell related... Happy New Year. Best to all. Matthew Nagowski | January 02, 2009 (#) |
-- WSJ: Cornell Wins NYC Tech Campus Bid (EBilmes) -- Barrier Update: City Approves Nets (DJost) -- Big Red Cymbal Guy (Nagowski) -- New York Times Survey on Campus Recruiting is Flawed (KScott) -- Barrier Update: Legal precedent suggests City of Ithaca will not be held liable for gorge suicide (DJost) -- Despite MSG Loss, Big Potential for Big Red Hockey (EBilmes) -- City Council Will Vote on Suicide Nets (DJost) -- An Encounter on the Upper East Side (Nagowski) -- Showing Off Your School Spirit (Nagowski) -- Chipotle Ithaca? (KScott) -- Cornell at the ING NYC Marathon (KScott) -- Crossing Over a Fine Line: Commercial Activity on Campus (KScott) -- Milstein's Downfall (Nagowski) -- Can any Cornell-associated organization really be independent of the University? (Nagowski) -- Slope Media Revisited (EBilmes) -- Slope Media Group Approved for Byline Funding (KScott) -- Occupy AEM? (KScott) -- New campus pub to be good for both Greeks and non-Greeks (Nagowski) -- Gagging the Election (Nagowski) -- The Changing Structure of Rush Week (Nagowski) -- Ivy League Humility in the Midwest (EBilmes) -- Of Median Grades and Economics Minors (Nagowski) -- Homecoming Recap (Nagowski) -- My Cornell Bookshelf (Nagowski) -- The Sun's Opinion Section Has Suddenly Gotten Good (Nagowski) -- Remembering the 11th (Nagowski) -- Cornellian Tapped as Top Economic Advisor (Nagowski) -- Cutting Pledging, and the Good Which Comes With It (EBilmes) -- Why Cornell Should Not Close Fall Creek Gorge (Nagowski) -- Welcome to the Class of 2015 (Nagowski)  |