Nov 06, 2016 06:54 AM EST By Loela Jonse, UniversityHerald Reporter

If universities need to budget - how much more the students? Prominent schools like Harvard University is preparing for possible tough years ahead. They are making sure that the quality of education will not suffer despite the many external factors.

Thomas J. Hollister, vice president for finance, and another Harvard Corporate member, Paul J. Finnegan '75, a Harvard Corporation member as backed by the treasurer, issued a report on the finances  of the university for 2016 fiscal year.

The data is based on the financial reports published on Harvard's website. The present year sees the shrinking of Harvard's $2 billion endowments. Such losses are something you cannot ignore especially if you are Drew G. Faust, Harvard University's president.

Returns on Harvard University's endowment may be limited further on. Relative to that, budgets for developments can also be constrained to balance the financial status of the university.

Naturally, if the decline in revenue rates is seen from 4-5% to 2-3% for the coming years, it is a correct move to also limit expenses by constraining budgets.

Harvard University is not the only one affected by the doubts on government funding and returns of endowments - but all educational establishments nationwide. They just saw the warnings early on, according to The Crimson.

To the contrary, Harvard still manages to decrease its debts from $5.5 billion to a $5.2 billion which is manageable during bad times. It has taken advantage of getting lower interests rates by refinancing about 2.5 billion worth of bonds.

Losses also are expected since they have spent more on improving employee salaries and benefits. $597 million also went to the allocation for construction projects, as seen in the financial reports through the Harvard University website.  

The renovations of the Smith Campus Center and Winthrop House plus the initial pre-construction works for the School of Engineering and Applied Sciences complex got a big chunk of the expenses.

The investment for the future aspect of the expenses is something that the new CEO of Harvard Management Company, NP will prioritize when he assumes office at the end of the year.

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