Dear Providence College Parents,

We live in extraordinarily uncertain economic times, the likes of which none of us has seen and the outcome of which none of us can predict.  In the short term, we know that many families associated with Providence College have been impacted by unanticipated job losses, investment declines that have sapped their savings, and even some difficulties in meeting mortgage payments. Among those who have not yet suffered such crises, there is a deep anxiety about the future. 

Cognizant of this situation, we have been able to offer financial assistance to a number of students whose families have encountered severe financial distress and were prepared to withdraw from the College. As a result, Providence College did not experience any decline in enrollment during the spring semester, again maintaining the College's position as having one of the highest student retention rates in the nation. I am proud of the way in which our financial aid office worked with distressed families to keep our students in school. This has always been and will remain the ethos of the College.

These unprecedented financial circumstances have challenged us to assess every aspect of our financial operation. While we search diligently to reduce our expenses, we will not compromise our strategic focus on student formation. We will continue to make significant investments in those priorities established in our 2012 Strategic Plan that relate to academic excellence and student development.

While many colleges are cutting faculty positions this year, we have instead filled our open faculty positions to take advantage of a buyer's market to recruit and retain highly recognized new faculty members. Coming to Providence from the top 100 graduate schools, these scholars will continue the tradition of teaching excellence established by senior faculty who are retiring. We have established three distinct schools within the College and hired three deans to oversee continuous improvement throughout our academic programs. Within our new School of Business, we have implemented a new business core curriculum and hired new business faculty as part of a nationally recognized accreditation process.

We also are moving forward with student life initiatives like the expansion of our student union, the Slavin Center, scheduled to be completed in September. This will enable us to provide more diversified social engagement opportunities to build campus community and promote student wellness. We are phasing in a multi-faceted transportation system to increase students' experiential learning in community service and other off-campus co-curricular programming. And we have recruited new leadership staff who bring new vision and energy to revitalize our career services and study abroad operations.

Maintaining our commitments to academic excellence and student services is difficult in these times.  You have doubtless heard in the media about Colleges who have drastically cut their budgets because of the decline in the value of their endowments.  Ironically, because our endowment is relatively small, we have historically not relied upon it to fund our annual operations and so are not as buffeted by market declines. The 25% decline in our endowment, from a high of $160 million last spring to approximately $120 million right now, will mean a decline in restricted scholarship funds and a decline in our ability to fund capital projects. While our donors continue to be loyal and generous, we expect that our revenue from philanthropy will be flat next year. 

In these difficult economic times we will therefore be even more dependent upon tuition and room and board.  In order to keep these cost increases as low as possible, we have adopted a series of cost-saving measures. For the balance of the current budget year, we have restricted hiring for unfilled staff positions and redoubled efforts to identify and eliminate non-essential spending within each of the operating divisions. The 2009-10 budget reflects an administrative hiring freeze and a salary freeze for all senior cabinet officers; a plan of salary adjustments for all other staff positions is currently under review. Capital projects that do not directly address critical student needs are being postponed at least until 2010-11. 

These austerity measures will enable us to advance student-focused initiatives while further increasing our financial aid commitment by $3.6 million, or approximately 9.1%, to $43.8 million. These new funds will be needed to address new student aid requests as well as address shortfalls in the value of donor-restricted scholarships that have resulted from decreased earnings in endowment funds. Recognizing that these economy-influenced issues will continue to impose additional stress on the College's operating budget, we have launched a new fundraising initiative to raise "current use" funds to further strengthen our ability to aid currently enrolled students who otherwise would not be able to remain at the College.

In the midst of this highly complex financial environment, the College must strike a very delicate balance in setting rates for tuition, room and board in 2009-10. We recognize the enormous economic pressures on many of our students and families. Yet we are obligated to achieve a balanced budget, resist curtailing investments in student development, and avoid personnel layoffs that would significantly disrupt campus services. With the approval of the Board of Trustees at its February meeting, tuition for the 2009-10 academic year will increase 4.9% to $32,320, the lowest increase in nearly a decade. Fees for room and board will increase from 5.0 to 5.3 %, depending upon the residence hall facility and meal plan options selected by students.

Even with this increase, Providence College's tuition and fees are still significantly lower when compared to most colleges within our Catholic cohort. Thus, while our rate of increase this year is slightly above the increase announced by some comparable institutions, Providence College remains competitively priced below the majority of our Catholic college cohort.

The deliberations surrounding the decision to set annual tuition and related fees are among the most difficult aspects of my job as College President; this year they have been wrenching. I am ever mindful of the aspirations parents have for their children and of the sacrifices parents and students make to achieve the goal of a college education. Yet I am also committed to insuring that Providence College perseveres through this turbulent financial environment in a position of strength. We have endured and flourished through past economic challenges. Through it all, we have placed our hope in God's providence. We do so again now.

Rev. Brian J. Shanley, O.P.