Q. How would you describe the University's financial situation at present, and can you predict where cutbacks in spending, if any, will come?
A. As I understand it, the University once again ran a deficit this year for the third year in a row; the deficit will probably be slightly larger than the deficits in the two preceding years, although certainly not on the massive proportions of the Columbia deficit. But I think we are experiencing a process which has gone on at other universities and which was well described in great detail, with many graphs and figures, by the provost of Princeton, Bill Bowen, who appropriately enough is an economist.
What Bill Bowen suggested was that merely to maintain the program that you have--keep up the library, maintain the departments and the teaching programs that you have--requires a growth of expenditure every year which exceeds the likely growth in revenue which you will get from traditional sources, namely tuition, foundation giving, government grants of a traditional variety, alumni contributions and so forth. Now when you have such a divergence--even a divergence of only a couple of percentage points--you go through the following process if these tendencies persist over a large number of years. You begin by reviewing the non-academic parts of the operation and you find that you can make certain cuts in maintenance and upkeep, and you can effectuate various economies in purchasing and in computer services and so forth. As the process continues, however, these economies are one-time economies and cannot be relied upon again. You may then find yourself cheating a little bit by simply deferring things that you're going to have to do at some later point. You put off on repairs and so forth in order to keep the deficit in balance. Then you may get to a further stage, which various universities have been going through, in which you seek revisions in financial aid policy to put more emphasis on loans rather than grant. You may also begin to cut back on your faculty. Because of tenure, that has to be done either through attrition or through not making as many appointments of junior faculty. If the process is allowed to continue still further in a major university, you either have to start cutting out large academic programs--I think some of that has gone on at Columbia--or you have to be absorbed into the state system. That's the process that goes on, unless something happens to reverse the tendency for expenditures to outrun income.
The obvious way of curing that disparity is to seek funds from some new source, and that source is presumably the federal government. The federal government is not a new source because it has already supplied, on the research side, very substantial amounts of money. But what is going on now is a very critical drama in the Congress of the United States where several different points of view are contending over the form of new federal support. One point of view is expressed by those who would really like not to have new aid given to higher education, and they are hoping that the other two points of view kill one another off so that no action is taken in this session. The second point of view is the one that would provide unrestricted grants of money to institutions on the basis of some formula, which is usually expressed--as it has been by Edith Green of the House Committee--as a certain number of dollars per student enrolled.
The third approach would give aid to universities in the form of providing substantial grants to needy students who would then take them to whatever institution they wanted to attend. When they enrolled in the institution, they would not only bring their federal scholarship with them, they would also authorize the federal government to provide supplementary grants to the institution to reflect the fact that the cost of a student significantly exceeds the tuition he pays. Now if one of the latter two points of view prevails, then the current strain on our budget will be somewhat lessened. If not, and the odds are against any action this year, cutbacks will become increasingly severe.
Getting back to the University, as I said before, we operated at a slight deficit last year. There were several areas where we experienced substantial losses--the Faculty of Arts and Sciences, the Harvard University Press and the Computing Center. The Harvard Houses increased their cumulative deficit to approximately $700,000. On the other hand, the Education School, we were pleased to see, completely wiped out its prior deficit and operated in the black. So far as I know, the other graduate schools, with the exception of the Medical School, also operated in the black.
At this point, it is not clear just how much will have to be trimmed from the budget and where. We have to look at a long list of areas where careful spending will add up to considerable savings on a yearly basis. In this way we can hopefully avert a situation as drastic as that at Columbia. By instituting cost consciousness throughout the administrative organization of the University--at the Computing Center, the Press, in central services and so forth--we can partially offset increases in operating expenses and higher wages. The Faculty of Arts and Sciences is another matter. John Dunlop is, of course, much better aquainted than I am with the particular aspects of the Faculty's budget, but the deficit has been steadily growing, and it may be greatly augmented by the expected deficit of more than $750,000 at Radcliffe resulting from the new merger agreement.
Q. Would you cutback funding for special programs or study groups before you would want to cut the size of the Faculty?
A. I think it is very hard to generalize. Many programs, special institutions and projects are independently funded or even endowed so that they do not cause a burden on the University's unrestricted resources. As for faculty, much depends on whether one is talking about cutting down on visiting professors, reducing the number of new appointments of junior faculty, or allowing tenure vacancies to remain unfilled. In the end, the deans must arrive at decisions based on the particular facts of each case.
Q. Although you have had only limited contact with undergraduates to this point, how would you judge the tenor of the student population following Harvard's first quiet spring since 1968?
A. I think it would be very hard for me to make any judgement at this time. We know extraordinarily little about the psychology of large groups. Moreover, some of the most recent data from universities have shown that problems which upset students the most are related to issues over which the universities have very little control. I can't even begin to say what the fall will bring, though I try, through personal contact and conversation with students, to keep myself informed of what students are