Colleges in Crunch #2: Northwestern University’s Purple Price Tag
In the past few years, Northwestern University has risen in prestige, as one of the US’s most respected private research universities. Enrolling over 22,000 students across its undergraduate and graduate campuses, it consistently ranks in the top 20 universities, including #9 on the US News and World Report. It was a huge shock, however, when a press release from the college showed that they were cutting over 400 jobs in the university, which is about 4% of their staff.
Why? Well, yet another university on a long list of the Trump Administration’s opp list, it was recently targeted for alleged antisemitic behavior on campus, as a result of protests on the Israel-Gaza conflict. As a result, it is currently facing a freeze in over $740 million dollars of funding from the US government. That’s 20% of its operating revenue stream - or the money that it earns that it can actually use to pay for everything from students, to health insurance to hot water. Without that federal funding, Northwestern would be operating at a deficit of hundreds of millions! With liabilities (big red flags) that add up to 3 billion dollars of debt (and negative aura), Northwestern has reasons to be concerned in the long term as well.
Northwestern runs on its operating revenues - and while it has enough finances to weather a financial crisis like this one, it’s probably not happening without ramifications for students and staff members. That’s why a deficit like the one looming in Northwestern’s future is so significant - as a private research university with significant dependence on research funding, it probably will take layoffs that severe to make a dent in the dumpster fire that’ll occur if it doesn’t figure out how those 700 million dollars will be replaced. At the very least,some of you who were looking forward to undergraduate research opportunities might have to think twice…
Curious about what distinguishes good debt from bad debt? Check out: https://readmomentum.co/episode-7-how-do-i-know-the-difference-between-good-debt-and-bad-debt/