Friday, September 21, 2001

Private Colleges in Urban Areas Are Most Likely to Feel Fallout From Last Week's Attacks, Report Says By MARTIN VAN DER WERF Private colleges, particularly some in urban areas, are likely to be hurt the most by the terrorist attacks on the World Trade Center and the Pentagon, according to a report released Thursday by bond analysts at Moody's Investors Service. The report predicts that the attacks are likely to subdue college fund raising. In addition, the subsequent stock-market decline will hurt college endowments, Moody's said. If the market does not rebound significantly, it could be a second consecutive year of negative returns on endowment investments, which may force colleges to cut their budgets or operate at a deficit. In the short term, Moody's believes that students "are less likely to matriculate at colleges beyond a day's driving distance" and may shun colleges in large cities, particularly the New York City and Washington areas. However, the report says institutions with large national followings and high admissions standards, like Columbia University and New York University, "are unlikely to have problems filling their classes, but their recent trend of ever-increasing applications is likely to reverse." The possible beneficiaries? Institutions in rural areas, which have suffered in recent years as students opted to go to college in major cities with more cultural diversions. Such colleges may make a comeback because they will be perceived to be out of harm's way, the report suggests. Also, public universities may become more popular as parents see their investment portfolios dwindle and realize that they can no longer afford the tuition at many private colleges. Public institutions will generally remain in stronger financial condition because they are less dependent on fund raising, the report asserts. Colleges were already seeing the rate of giving slow before the attacks because of the economic downturn. "Fund raising for endowment and capital projects is ... likely to decrease as donor uncertainty increases," the report says. "Depending on the severity and duration of the current economic climate and political crisis, the downfall in annual giving could last beyond the current fiscal year." Easy-to-print version E-mail this article

Education Dept. eases student-privacy rules for FBI's terrorism investigation On campuses across U.S., students hold rallies for peace, drawing mixed responses Private colleges in urban areas are most likely to feel fallout from last week's attacks, report says Pakistan's Islamic colleges provide the Taliban's spiritual fire In Afghanistan, a forlorn university prepares for even more isolation Faced with no way to pay for it, U. of California shelves dual-admissions plan Scholars question the image of the Internet as a race-free Utopia A political scientist creates an online university catering to conservatives