{shortcode-007c11267b66a07f87040d16ef447d74ab86e8b4}The Graduate School of Arts and Sciences will increase student stipends by 1.5 percent in the 2017-2018 academic year, an unusually small increase that GSAS Dean Xiao-Li Meng attributed to poor returns on Harvard’s endowment.

The value of Harvard’s endowment dropped by almost $2 billion in fiscal year 2016, a plunge that has strained budgets across the University and particularly at GSAS. In addition to cutting the size of the stipend increase—last year, GSAS students received a 3 percent bump in their stipends—GSAS will admit 4.4 percent fewer students next year.

In an email to GSAS students, Meng pointed to Harvard’s investment woes as a factor of the modest stipend raise, which trails the current rate of inflation.

“In the fall, Harvard learned that a disappointing financial return on the University’s endowment would create significant financial challenges across the University,” he wrote. “We needed a solution to the problem of meeting increased expenses with flat revenues.”

Meng wrote that the rising cost of health insurance also influenced GSAS administrators.

Some graduate students, including some involved in the unionization effort at the school, said the news was disappointing.

"It just shows that the people making these decisions have no sense of what’s important to graduate students and it just makes abundantly clear that students need to have an active voice in these matters," Sam Klug, a GSAS student and union organizer, said.

The cost of housing will also increase. As GSAS student stipends increase by 1.5 percent next year, rent for GSAS dorms will also increase by 1.5 percent. Rent for Harvard University Housing—Harvard-owned apartments whose rent is controlled by the University, not GSAS—will increase by 3 percent on average.

Some students said that the size of their stipend increase will not cover the increase in housing costs.

“I might have to provide other sources of income,” Sam D. Ewing, a graduate student and union supporter, said. “This adds years to the degree. It pulls time and energy away from scholarship.”

But not all students said they disagree with the decision to raise stipends by 1.5 percent.

“My reaction to the news is that the lower-than-usual stipend increase...was a very reasonable decision made by the University administrators,” Jae Hyeon Lee, a graduate student, wrote in an email. “Providing a higher stipend increase this year would have forced the University to accept a lot fewer students...which I don't think is a good thing from the perspective of increasing diversity.”

Harvard Graduate Student Union-United Auto Workers, a student unionization effort,wrote in a statement that a union would help prevent lackluster stipend increases in the future.

“One of the core reasons to have a union is so we have a say in our compensation. With a union, the administration would have to bargain with us before making any changes, and we would democratically decide a contract,” union organizers wrote on the group’s Facebook page. “ That contract could guarantee rates of pay increase for future years. Without a union, the administration can make changes at any time without consent.”

Meng’s announcement about stipends comes in the middle of a student unionization election at Harvard. The University and HGSU-UAW have until April 3 to submit post-hearing briefs to the National Labor Relations Board. After receiving these documents, the NLRB could decide the fate of student unionization at Harvard.

—Staff writer Caroline S. Engelmayer can be reached at caroline.engelmayer@thecrimson.com. Follow her on Twitter @cengelmayer13.