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MIT's president outlines budget-cutting measures

E-mail|Link|Comments () February 19, 2009 01:51 PM

By Tracy Jan, Globe Staff

MIT President Susan Hockfield said today that senior administrators and faculty will forgo raises next year, as she outlined steps the university is taking to weather the financial downturn.

(Photo by Bill Brett)

Tuition and fees at the Massachusetts Institute of Technology will increase 3.8 percent next year to $37,782, the smallest increase in eight years. And the undergraduate financial aid budget will rise more than 10 percent, including an additional $1.4 million to help middle-income families during the recession.

The university this school year has already approved more than 40 requests from students asking MIT to adjust their financial aid package because of job loss or other change in families’ finances – more than double the number of students in a typical year, Hockfield said in a letter to the MIT community. That number is expected to grow as families’ circumstances worsen, she said.

The MIT endowment, which stood at close to $10 billion at the end of the last fiscal year, is projected to drop by 30 percent by the end of June. Already, it has declined between 20 percent and 25 percent, Hockfield said in her letter.

In addition to the plummeting endowment, pledges by donors have fallen by more than 40 percent, Hockfield said.

While its far wealthier neighbor, Harvard, has imposed salary freezes on all faculty and nonunion staff for the next year and announced plans on Wednesday to delay construction in Allston, MIT is proceeding with less drastic cuts for the time being. The university will also go ahead with all of its major building projects, including the David H. Koch Institute for Integrative Cancer Research, extending the Media Lab, and a new business school building.

“We begin the spring semester knowing that challenging work and hard decisions lie ahead, as we determine how to strengthen our education and research mission with diminished resources,” wrote Hockfield, who has declined a salary increase for this year and next year. “As we respond to the pressure of economic contraction, it matters very much how we shape the future of MIT.”

The university plans to cut at least $50 million in next year’s budget. But pay freezes will not be instituted across the board, Hockfield said. Faculty and full-time staff on the lower end of their pay scales – for professors, less than $125,000, and for staff, less than $75,000 -- will still receive modest raises. MIT will also sharply slow hiring.