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- Stock market plummet erodes scholarship fund
- By Ryan McLaren
Trail Staff Writer- Expect less scholarship money next year. The current economic downturn will almost certainly cut into the scholarship funds that the Northwest College Foundation provides for NWC students.
As of Oct. 31, the NWC Foundation had lost $3.5 million due to the devaluation of some of its holdings on the stock market, according to Shelby Wetzel, executive director of the NWC Foundation.
Total Foundation assets, as of Oct. 31, are worth $19 million. This time one year ago, the total assets were worth $24 million.
The Foundation has six different firms to manage its money, each one specializing in different types of investments. All of these lenders are either keeping on par with their benchmarks or are doing significantly better, according to Wetzel.
Due to this, the NWC Foundation has actually beaten the curve. “Oct. 21, the Standard and Poor’s [index] was down 35 percent, and we were down 20.6 percent,” said Wetzel. “We can’t be disappointed with the money managers.”
The losses will affect the amount of scholarship money available for next year. The Foundation determines the market value of its scholarship funds on Dec. 31 of each year, and typically pays out 4.5 percent of that in scholarships.
“We will be decreasing the amount of that percentage in order to not eat into the investments any further than the market declines have already eaten into them,” said Wetzel.
The payouts will only come from funds that have done well, and not from the funds that have lost value.This year the Foundation paid out $450,000 in scholarships.
NWC itself has been very frugal with its working budget from the state and is nearing its maximum surplus of 8 percent. One strategy to compensate for the decrease in scholarships awarded by the Foundation is for the school to spend down part of its surplus by awarding scholarship money with these funds.