Following Wesleyan’s 2012 Self-Study and reaccreditation visit, the NEASC Commission on Institutions of Higher Education asked that in its fifth-year interim report the University give special emphasis to the areas of concern noted below.
- Assessing the impact of recent financial decisions on the institution’s mission and financial sustainability and assuring the appropriate participation of the University’s constituencies in decisions about resulting operational adjustments
- Identifying and promoting contributions of the institution’s graduate programs, particularly its Ph.D. programs, as part of the University’s mission and strategic vision
- Establishing an effective advising model to assist undergraduate students in articulating their learning over the four years
Area 1. Financial Resources
The third overarching goal of Wesleyan 2020 is “Work within a sustainable economic model while retaining core values,” and the difficult decision to become need-aware in admissions has put that goal to the test. This was a decision discussed at length with students, faculty, alumni and trustees, and those discussions educated many on how financial aid expenditures affected operations of the university more generally. Wesleyan has been able to maintain “need-blind” admissions for about ninety percent of the class – more was deemed unaffordable. Still, the University today spends more on financial aid than ever before, and the President in Beyond 2020 – Strategies for Wesleyan has now proposed spending even more. One signal priority is to support more fully the financially neediest of our students. We have kept loan levels low (a maximum of $19,000 over four years) and recently revised work/study obligations so as to be sure these do not undermine the ability of students to take full advantage of educational opportunities.
College affordability is arguably the defining issue in higher education today, and Wesleyan remains expensive; but because we have maintained moderate (close to inflation) tuition increases, we have dropped down the list of most expensive schools: in 2017 Wesleyan ranks 25th out of 43 peer institutions; in 2013, we ranked 3rd. We also offer a three-year program that allows families to save about twenty percent of the cost of a Wesleyan education.
Since the last accreditation review, we have continued to address issues of spending, investment, and revenue. Our goal has been to increase our economic capacity so as to be able to pursue our institutional mission with renewed vigor and purpose, and in this we have made real progress. We have substantially reduced the annual spending draw on the endowment (in 2010 it was 7.30%, in 2013 it was 4.60%, and in 2016 it was 4.20%), increased the percentage of annual fundraising that is invested in the endowment (in 2011 it was 46%, and in years since it has ranged between 51% and 61%); and, most importantly, completed the most successful fundraising campaign in Wesleyan history. That campaign, launched at a time of national economic chaos, had as its goal $400M, considered overly ambitious by many. The campaign ended in June 2016, and thanks to the extraordinary generosity of alumni (and especially trustees) and the remarkable efforts of University Relations, the final tally was $482M, with 58 percent of the dollars raised going into the endowment, a major change from past practice. At the end of FY 2016 our net assets stood at $917M, a 52 percent increase from our 2010 net assets of $603M.
Both S&P Global Ratings and Moody’s Investors Service were impressed by our economic model — giving Wesleyan credit ratings of AA stable and Aa3, respectively — and in 2016 we successfully issued $250 million of 100-year, fixed-rate taxable bonds, refinancing the majority of our existing debt. We determined this to be a historically unique opportunity to obtain long-term debt at a favorable rate (4.781 percent) and see this as a significant move toward solidifying our economic future. In the near-term, we no longer have to save for what would have been an impending balloon payment on our debt, and we have put aside $2M, which is projected to increase over the 100-year period so that it will be sufficient to pay off the entire principal. This means that we have freed up considerable resources for a number of initiatives, including facilities projects. (See the concluding section “Institutional Plans.”)