Quick Facts

• The recession lasted from late 2007 to mid-2009
• It began due to the Housing Bubble Bursting
• During the recession house prices fell approximately 30%
• GDP fell 4.3 % during the recession
• The unemployment rate peaked at 10% during the recession
• The U.S. lost 8.7 million jobs due to the recession
• Poverty rates grew from 12.5% in 2007 to more than 15% in 2010

Interviews

Interview with Jeffery Noss (Board of Trustees Member from 2001 to Present)

We selected Jeffery Noss because he was on the board during the 2008 recession and he made important decisions on how the university would proceed economically. He was on the board as the Chair of Buildings and Grounds for a while when McClendon was built as well. Noss was extremely helpful in understanding how the recession impacted Drew. The Drew University endowment for the school in 2007 was $250 million and went down to 170 million in 2008 due to the recession. The recession impacted the school to a gefree and the spend rate was impacted. The spend rate is what universities feel as a prudent withdrawal on an annual basis from the endowment as a contribution to the operating budget of the school. Drew was 90% tuition dependent. There was a general uneasiness that settled over the school but nobody was super super concerned from what Noss recalls. The endowments took three, four years to get back to where it was but Drew recovered decently fast. Noss also explained how the board of trustees worked and made decisions. There are a little under 30 (the law does not allow to go over 35) and since Drew has a connection to the United Methodist Church, four of the 35 slots are filled with regional bishops of the church. There is also an automatic spot for alumni slots, there are 15 right now. President Link is the only employee and everyone else is volunteering and donating to the school. His knowledge greatly helped our history project on the 2008 recession at Drew University.

Interview with Robert Weisbuch (President of Drew University from 2005-2012)

Robert Weisbuch was a former president of Drew University from 2005-2012. During his time as president of the university, the great recession of 2008 occurred. He was able to give a  firsthand experience of how everything went down from his perspective considering the position he held. Something he emphasized in his answer which I also think is key in understanding Drew’s overall impact with the recession is that schools who receive less than $500 million in endowment are generally tuition dependent. In short, that means most of the financial resources come from what students pay. On top of that, the university’s rates had a surplus of $500,000, and the state no longer provided their $l million in aid. Theoretically, they lost $1.5 million on a $70 million budget among the other hikes in prices such as infrastructure and food. To give a little more context, Dr. Weisbuch had a plan while leading the university to create more academic programs and to diversify the faculty and student body, but any project with major ties with financial means was a problem because of the financial state of the university, and the increase in prices of everything else. To make up for lost revenue, faculty’s salaries would be cut or the university’s benefits for retirement. He decided to go with the latter decision, and that was not well received. In his words, “the campus mood was at best melancholy, at worst furious.” Nonetheless, he was able to curate some change within the civic engagement realm.
 

Average Tuition Cost for In-State Undergraduate Students

This graph compares the average cost of tuition of:

• 2 Year New Jersey Community Colleges
• 4 Year New Jersey Public Colleges 
• 4 Year Public-Misson Independent Colleges in New Jersey (private and independently funded school division that Drew is included in) 
• Drew University

How did the recession affect Drew overall and impacts till today?

Throughout our interviews, we have been able to get a better understanding of  what Drew looked like during the recession. Our group had the opportunity to interview Mr. Jeffrey Noss, who was a board member during this time period and still is. Additionally, we were also able to ask a few questions to the former president of the university from 2005-2012, Dr. Robert Weisbuch. Some things to understand at first is that Drew University is mostly tuition dependent, 90% to be exact. Virtually, all of the university’s income comes from what they charge the students. Additionally, Drew is tuition dependent because it receives less than $500 million in endowments. In 2007, the endowment was $250 million and decreased instantly to $170 million in 2008 due to the recession. Obviously, this impacted the spend rate, which is what universities feel is a prudent withdrawal on an annual basis from the endowment as a contribution to the operating budget of the school. Not only that, the university lost the aid of $1 million it received from the state and saw a surcharge in their rates by $500,000. Theoretically, they lost $1.5 million on a $70 million budget among the other hikes in prices such as infrastructure and food. To give a little more context, Dr. Weisbuch had a plan while president of the university to create more academic programs and to diversify the faculty and student body, but any project with major ties with financial means was a problem because of the financial state of the university and the increase in prices of everything else. To make up for lost revenue, faculty’s salaries would have to be cut or the university’s benefits for retirement. He decided to go with the latter decision, and that was not well received. In his words he described it best as “the campus mood was at best melancholy, at worst furious.” Nonetheless, he was able to curate some change within the civic engagement realm.

The effects of the recession are not really felt today at Drew today. Tuition rates went down during the recession, but continuously rise each year considering the institution is 90% tuition based.