Published: Wednesday, March 4, 2009 in The Whitworthian.

Part of me thinks that the groundhog returned to his hole this year more out of discouragement at the financial situation in our country than some notion about the weather.

Unless you’ve been living with him in that hole in the ground, you know at least a little about what’s been going on. In very short recap, we’re in a recession because a lot of people made very poor decisions regarding debt. The economy has been building up to this for years – the United States has been becoming more and more credit happy for the past couple of decades, slowly filling the cup of financial backlash until it spilled violently over last year. Some have compared it to the Great Depression. If things keep heading down the road that they seem to be, the likeness will probably keep getting more eerily correct.

Of course, there have been a few winners, people and organizations who are still doing rather well for themselves in spite of the situation. And I’m happy to report that Whitworth counts itself among that number. Our fine university is on its feet in this shaky time, while many organizations are being forced to make layoffs and close their doors. The same is not necessarily true for all colleges. Those reliant on government funding in particular are hurting as the green waterfall from Capitol Hill slowly dries up.

In contrast, Whitworth is still able to build and expand, albeit at a slower, more cautious rate. The new residence hall is still on track. Some projects, such as the HUB expansion and the new science building have been pushed out a bit, but this is such a small concession to the economic situation that it could almost be seen as a victory cry.

Whitworth, being a private organization, has a much lower reliance upon government funding than public universities. Another source of funding that Whitworth has had little reliance on is that of debt. Traditionally, Whitworth has taken a very conservative stance in regards to debt – and that’s a big part of why the school is keeping its head above water in this tough economic time. Whitworth’s current debt hovers somewhere around $26 million dollars – which, according to Whitworth’s self-study report published late last year, is well below the average balance seen in comparable neighboring institutions.

Whitworth is now at a crossroads, however. We live in a time when technology, business and education are advancing much faster than the funding can keep up with. According to the self-study, Whitworth is considering moving into more debt in order to fund upgrades and expansions to keep up with the times. To quote the self-study, “Conventional wisdom is now shifting to the realization that debt avoidance may be more costly for the institution in terms of academic reputation and institutional viability than the actual cost of debt.”

Now, I’m no financial expert, but I personally tend to agree with Whitworth’s traditional stance on debt. It seems to me that staying out of debt is what has kept us out of the deep waters – and now when those deep waters are particularly stormy and full of sharks, is it really a good time to be wading in?

Brian Benzel, vice president for finance and administration, laid out in a nutshell what Whitworth is looking at doing on the financial front.

“Our primary financial goal is to sustain and support the people and programs that serve students and who comprise the university community,” he said. “Debt is a vital strategy for businesses, including universities, and it must be managed with care.”

Benzel also said that Whitworth’s financial strategies have been reviewed by many experts, including Moody and Fitch, both of whom have given Whitworth a positive review.

In short, Whitworth is looking at getting into more debt, primarily in order to fund the new science building. Thankfully, there has been a substantial amount of looking done before any leaping was considered, and the university seems to be maintaining its traditional conservative approach.

“Investing in our facilities is a major contributor to these [financial] goals, but not the only one,” Benzel said. “The fact that we’ve modified the pace of our plans while continuing to pursue them is reflective of our conservative approach.”

So while the groundhogs outside the pinecone curtain might be gulping Valium, the ones that call Whitworth home have little to worry about while they wait out the next few weeks of cold. I recommend that they spend the time sending some advice to Congress.