Something drastic is happening at Yeshiva University.
Financial data reviewed by the Forward indicates that Y.U.’s long-running fiscal crisis has taken a more dramatic turn than at any time in its recent history.
This past spring, there were signals that the half-decade of economic free fall at Y.U. was finally easing. The board gave raises to the faculty, ending a four-year wage freeze. And the administration promised to increase contributions to faculty retirement accounts, reinstating cuts made at the nadir of the crisis.
Then, in late November, everything changed.
A November 20 letter to alumni suggested the crisis was growing, not abating. And on December 10, the school announced a new round of drastic cuts — including a revocation of the promised increases in retirement contributions.
The university won’t explain the reversal. “I’m not going to be able to offer you anything on this,” said Matt Yaniv, a Y.U. spokesman.
The faculty is worried. “We don’t really understand how this surprise occurred,” said one member of the undergraduate faculty, who asked not to be identified because he was not authorized to speak publicly. “I really don’t understand how we got from June, where things are pretty good, to literally three months later where the situation, at least at the Manhattan campuses, seems to be [dire.]”
So what’s going on at Y.U.? A new report from credit rating agency Standard & Poor’s provides a clue: According to preliminary audit results, the school lost even more money in 2013 than it did in 2012.
The university’s 2013 fiscal year ended over the summer, and it has yet to finalize its financial statements. But S&P saw a preliminary version of the 2013 results in November while preparing its report, and they don’t look good.
According to S&P’s December 6 report, in which the agency downgraded Y.U.’s debt from an A+ rating to an A rating, Y.U.’s operating deficit in 2013 was even steeper than in 2012.
The school’s operating margin dropped from negative 13% in 2012 to negative 17% in 2013, meaning that its deficit grew as a share of its income. S&P doesn’t say the size of the 2013 deficit, but the 2012 deficit was $106 million.
Y.U. carried $493 million in debt as of the end of the 2012 fiscal year. The debt at the end of the 2013 fiscal year is not included in the report.