Last week I was interviewed by a reporter from insidehighered.com. The article appears today.
Here’s one quote: “Jo Ellen Parker, president of the college, said that the cuts were designed to show the commitment to going back to full spending on retirement accounts, salaries and so forth. Had the college simply reduced its pay levels, she said, a signal would have been sent that perhaps the college was scaling back — which she said is not the intent. And the top administrators are working without pay rather than taking furloughs because the college needs to save money and they need to do their jobs.”
I think the article does a nice job of framing an important strategic question for many small liberal arts colleges, which is how to manage the “discount rate.” On the one hand, allowing the discount rate to rise disproportionately creates obvious financial risks for an institution. On the other, failing to relax the discount rate judiciously can lead to other financial risks. Every campus I’m familiar with struggles to navigate this particular Scylla and Charybdis.
As the reporter notes in the article, at Sweet Briar we are actively researching and discussing this issue as we consider our approach to managing the discount rate going forward. Our goal to make sure that Sweet Briar is affordable to families of qualified students while we look to the long term financial health of the college: that is, to make sure that our discount rate policies support both access and sustainability.







