Radcliffe Is Financially Healthy and Committed to Students

Your recent editorial ("Radcliffe Should Cut Bureaucracy," October 24) raised questions about Radcliffe's financial health and makes several assertions concerning the College's investment in its current capital campaign. As Radcliffe's financial vice president and treasurer, I would like to correct some erroneous information and clarify several points.

The Crimson's overriding interst, which we share, appears to be two-fold; whether Radcliffe is financially healthy, and whether the College invests appropriately in its undergraduates.

First, let me correct your assertions about the financing of our Campaign. Colleges and universities certainly pay for their capital campaigns in a variety of ways. Many, in fact, amortize the costs over a period longer than the duration, the campaign. We, instead, are funding our Campaign as we go, from a reserve fund previously set aside to support various investments in Radcliffe's development.

Second, Radcliffe, unlike many academic institutions, has remarkably low debt, all of which has been undertaken for capital improvement purposes. Our annual debt service is at the enviable level of 1 percent of operating expenses. In fact, Radcliffe is retiring its capital improvement debt earlier than originally scheduled.

How healthy is Radcliffe? Outside measures of financial health are useful to this analysis. One indicator is the proposed Federal Title IV Responsibility Standards which determine an institution's eligibility for financial aid funding. These standards combine date on three criteria--debt/asset ration, reserves and net income--to derive a score by which institutional financial health is evaluated. Radcliffe's FY96 score is an excellent 4.6 on a scale of 1-5, where a score of 1.75 is required to certify a financially responsible institution.

Another critical indicator of financial health is an institution's bond rating. In March 1996, Moody's Investors Services rated Radcliffe bonds as Aaa. This means that Radcliffe's bonds are judged to be of the best quality.

External measures such as these confirm that Radcliffe is financially sound and prudent in investing its reserves to develop academic programs and the infrastructure necessary to support them.

Most important, let me clarify the level of our commitment to undergraduate programs. Over the period of FY93-00, the time frame of our Campaign, Radcliffe plans to spend $100 million on all of its programs. Of that, $46.4 million is slated to directly benefit undergraduates: about $22 million in financial aid from College resources, and $10 million from estimated federal snd state funds gained directly by Radcliffe's application; another $3.4 million in federal funds to provide work study opportunities at the College; and $11 million on the programs of the Radcliffe Office for Undergraduate Programs and the Office for the Arts at Harvard and Radcliffe.

Given that under the 1977 Harvard and Radcliffe Agreement, Radcliffe has delegated the direct responsiblity for undergraduate instruction and day-to-day student affairs to Harvard and transfers all of its undergraduate tuition to Harvard, these figures clearly show that Radcliffe is providing robust financial support to undergraduates. In addition, Radcliffe provides students with academic resources in its research and policy centers and valuable connections with a continuing stream of talented scholars and alumanae. These contributions reflect the College's unwavering commitment to its students. --Nancy J. Dunn   Financial Vice President and   Treasurer, Radcliffe College