March 5, 2009

Dear University of Miami Parents:

The economic crisis impacting our nation and the world has implications for all of us—including the University of Miami. I appreciate that many of our parents have taken the time to express their concerns, and I am grateful for your suggestions.

I want to assure you that our top priority continues to be ensuring that all of our students succeed academically and that we maintain the high quality of our core teaching, research, and clinical care programs.

The following Q&A addresses the most common questions I have received about how the economic downturn is affecting the University. You’ll see that your University is being proactive in how it responds to the crisis.   

Overall, how is the University addressing the crisis?
In recent years, the University has been in a strong investment mode, and while our strategic investments will more than pay off in the long run, for now we are slowing our growth and narrowing our focus. Declines in the stock market, coupled with a drop in philanthropy, have negatively impacted our cash position at a time when there is limited access to credit. So we need to take some time to strengthen our balance sheet—hold onto our cash and minimize additional debt—while ensuring that costs and revenue are in line with our current operating environment. The steps we are taking include:

  • Instituting a hiring freeze and reducing expenditures for travel, supplies, and other miscellaneous expenses; only positions meeting crucial University needs are being filled;
  • Freezing employee salaries for the next academic year;
  • Delaying almost all construction projects except for those that are well under way, including the Robert and Judi Prokop Newman Alumni Center.

How are you reaching out to current students and their families who might be affected by the crisis?
We have been working with students who need help to complete their studies at the University and graduate on time, and will continue to do so. Students and families with financial concerns should contact our Office of Financial Assistance Services. Students can also utilize the resources of our counseling center staff and University ombudspersons. In addition, students can use career counseling services available at the Toppel Career Center as well as other college- and school-based resources.

The Office of Financial Assistance Services has and will continue to assist families that have been affected by the economic downturn through the Professional Judgment Appeal, a mechanism for families to share with us details specific to changes in their financial situation. Students and their families are urged to contact the office if they have questions or need assistance. The Professional Judgment Appeal form can be found in the forms section of the Financial Assistance Web site at

Will tuition be increased?
Undergraduate tuition for the academic year 2009-2010 will increase 3.89 percent, which represents the smallest increase in 15 years. In addition, the College Work Study program may be increased as a result of the recently passed federal stimulus legislation. 

How is the federal stimulus package increasing availability of Pell Grants?
While it is expected that the federal bill may increase opportunities for forms of aid, all the details on how it may impact our students is still forthcoming.

The stimulus bill does not relax the Pell Grant eligibility criteria for most students but does increase the amount eligible students receive. The 2008-2009 academic year maximum Pell Grant is $4,731. The maximum grant for 2009-2010 will be $5,350.

Beginning in the summer of 2010, Pell-eligible students enrolled in fall, spring, and summer courses will be able to receive a Pell Grant for the summer (previously, if Pell was used for fall and spring there was no summer eligibility).

How is the downturn impacting the University’s endowment, fundraising, and sponsored research?
Like most major universities, our endowment has lost more than a quarter of its value due to market declines and spending distributions. Fortunately, endowment income represents less than 2 percent of our operating budget—far less than many of our peer institutions. As a result, the impact to next year’s budget will be a relatively modest $3 to $4 million.

In times of crisis, history has shown that communities rally together to provide assistance and support. We have experienced the same. At mid-year, Alumni Annual Fund giving in dollars is slightly up from last year, with a 38 percent increase in the number of Web-based gifts through the alumni giving site Parent giving has increased significantly as well. In these difficult times, we are thankful that our alumni and parents are continuing to support the University and its students. So far this year, overall University fundraising has declined by 6 percent. In this economy raising dollars to support critical needs is a challenge, thus giving from alumni, parents, and friends of the University is needed more than ever. Our history of fundraising success reinforces our belief that in the long term the University will continue to enjoy broad philanthropic support.

Sponsored research at the University faces major challenges from federal, state, and private funding sources. For example, the National Institutes of Health has funded the current year at 90 percent of the awarded amount due to the absence of a new federal budget, and state budget problems have caused cuts in existing research grants from the Florida Department of Health. On the other hand, we are preparing to take advantage of $10 billion in new National Institutes of Health funds earmarked for higher education and infrastructure in the federal stimulus bill. Additional funds also are available from the National Science Foundation.  

What’s the outlook for the University’s future?
We are fortunate—education and health care are generally good businesses to be in during difficult economic times. No one knows precisely how the economic crisis will play out, so we are building plans that are conservative and that have the flexibility needed to respond to a rapidly changing environment.  

Over the last 83 years, the University has made great strides in becoming a world-class teaching and research institution—while repeatedly weathering adversity—and in the past seven years it has risen dramatically in the national rankings. We will not lose the momentum we have built or step back from the significant gains we have made, but we must use all our creativity and discipline to meet today’s challenges.

As parents, you are an integral part of the UM family, and I look forward to hearing more of your suggestions, questions, and concerns. You can e-mail me at As always, I extend my deepest thanks for your support and trust in our University.


Donna E. Shalala

Office of the President
P.O. Box 248006 Coral Gables, Florida 33124-4600
305-284-5155 Fax 305-284-3768

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