In this year’s letter, I describe some of the extraordinary projects envisioned by that strategy and campus plan that have opened already or are opening soon. I also reflect on national conversations in which Princeton has an opportunity and obligation to lead, including discussions about the role of charitable higher education endowments and our ongoing commitment to attract talented people from all sectors of society and enable them to thrive at this University. 

My comments do not address the multiple executive orders and other federal directives issued over the last ten days. As I noted in my brief message to the campus yesterday, I appreciate that members of our community have many questions and concerns about those orders. As I also said, there is much that we do not yet know about their implications. My colleagues and I are examining the orders and exploring what steps we can take that are sensitive to the needs of our community, consistent across the University, and in compliance with applicable laws. We will be in touch when we have more information to share. 

From ‘Coming Soon’ to ‘Now Open’: 18 Months of Ribbon Cuttings 

As Princeton enters the final months of the Venture Forward alumni engagement and fundraising campaign, the projects described in my first two State of the University letters are now coming to life across the campus. We are in the midst of an 18-month period in which the University will open more than a dozen substantial new facilities and spaces that enhance the University’s mission. 

I especially look forward to cutting the ribbons on a collection of buildings pivotal to the University’s core teaching and research mission. One of them is our magnificent new art museum, which I expect will energize scholarly and educational projects in the humanities, social sciences, and other disciplines. The Princeton University Art Museum will at last have a building worthy of its outstanding collection — and that collection has received some dazzling and culturally significant additions while the construction project has been underway. The building will also provide a home for Princeton’s Department of Art and Archaeology and spectacular public spaces for lectures, classes, and other events that are essential to the scholarly life of our community. The grand opening celebration next fall will be a major campus event. 

Over a period of six months beginning this spring, facilities for the Omenn-Darling Bioengineering Institute, the Department of Chemical and Biological Engineering, the High Meadows Environmental Institute, the Department of Ecology and Evolutionary Biology, and the Department of Geosciences will open along with a new Commons (a shared space that will support multiple departments) on Ivy Lane north of Princeton Stadium. These state-of-the-art science and engineering buildings will enable Princeton researchers and students to address some of the most intellectually compelling and urgently important issues of our time. 

Several projects advance the University’s commitment to support and promote the mental and physical well-being of its students, staff, and faculty. These include the spacious Frist Health Center that opened in January; the immediately popular Class of 1986 Fitness and Wellness Center attached to Dillon Gymnasium that opened last semester; and the recently unveiled Wilkinson Fitness Center also accessible to the entire University community, which is located within the Racquet and Recreation Fieldhouse on the Meadows Campus across Lake Carnegie. 

If you’ve not done so already, I hope that you will find time to visit all these facilities. The Frist Health Center provides a new and better home for University Health Services. It also offers beautiful spaces for programs and events that we hope will encourage students, faculty, and staff to make wellness central to their lives. I expect that the center’s warm, welcoming design will make people eager to spend time there — not something most would say about the old McCosh! 

The fieldhouse and the Wilkinson Fitness Center contained within it are among several projects that have activated the Meadows Neighborhood and made it integral to Princeton’s campus and mission. The largest of those projects, the Meadows Graduate Housing complex, opened last spring. It enabled Princeton to offer housing to more fully enrolled graduate students than ever before, advancing a major long-term priority of both the University and the Graduate Student Government. Haaga House, the headquarters for Princeton’s rugby programs, opened in the Meadows Neighborhood this fall, and the softball team will play its first season at Cynthia Lynn Paul ’94 Field this spring. 

Major landscaping projects have also revitalized portions of the campus. For example, the reopened Poe and Pardee Fields emerged as a joy-filled focal point of outdoor activity on campus last fall. Underneath the gracious lawns and expansive playing fields are geo-exchange bores that will help Princeton achieve its carbon-neutrality goals and make the campus more sustainable for decades to come. 

The overall scope of the transformation is remarkable. In late 2017, we published what we described as a 10-year campus plan within a 30-year window: we sought to identify options and principles to guide decision-making over the subsequent 10 years while preserving flexibility and capacity that the University would require over the next 30 years. When the projects currently under construction or in design are complete, the total square footage constructed or renovated will be in the mid-range of what was projected for the entire 30-year period. For that reason, and because the current plan’s 10-year period concludes in 2026, we are initiating the process to update that plan. As was the case with our current campus plan, all community members will have opportunities to participate in the process. 

Investing in People, Including Another Sector-Leading Record for Student Financial Aid 

The improvements to the physical campus are especially visible, but people are the heart of this University. I am therefore especially proud of our initiatives to ensure that talented faculty, students, and staff from all backgrounds can thrive at Princeton. As part of those efforts, we have continued to increase the socioeconomic diversity of our undergraduate and graduate student bodies. 

Last year, the trustees of the University announced that Princeton would aim to have at least 70% of the undergraduate student body on financial aid. That was an ambitious goal, significantly higher than what Princeton (or, as far as I know, any of its peers) had ever achieved. It represented a commitment to increase the representation of middle-class and low-income families in Princeton’s student body. 

In this year’s entering class, more than 71% of students are receiving financial aid and more than 21% are eligible for federal Pell grants, which go to students from lower-income families. We also matriculated 36 transfer students this fall, the largest cohort since we reinstated Princeton’s transfer program in 2018. The entering students include 26 community college transfers and 23 military veterans. (Some students are in both categories.) Our transfer students bring exceptional talent to Princeton and diversify the range of experiences and perspectives on campus.[1] 

At the same time, Princeton is forging new connections with extraordinary people around us. In December 2023, the University announced a partnership with Governor Phil Murphy and the state of New Jersey to launch the NJ AI Hub. The NJ AI Summit, held on campus last April, drew more than 600 academic, business, and government leaders from throughout the state and beyond. We are poised to announce major new milestones for the Hub in the days ahead. This initiative, along with the world-class research taking place under the auspices of the Princeton AI Lab and throughout the University, will simultaneously enhance Princeton’s ties to the region around it and help to reinforce American leadership in critical AI-related technologies. 

Other exciting projects are on the horizon. Hobson College is rising across Elm Drive from Whitman College, with its opening anticipated in 2027. When the environmental science departments vacate Guyot Hall, it will be renovated and expanded to become Eric and Wendy Schmidt Hall — a much-needed state-of-the-art new home for Princeton’s Department of Computer Science and related units. A facility to house a new quantum science and engineering institute is in the advanced stages of design, and additional projects will follow. 

These many enhancements to the University reflect the tremendous generosity of Princeton’s alumni and friends. They have rallied to support Venture Forward, a mission-driven campaign defined by the University’s strategic priorities rather than by dollar goals. Venture Forward launched publicly in October 2021 after a multiyear quiet phase. When it concludes this summer, Venture Forward will be one of the most successful campaigns in Princeton history in terms of dollars raised, alumni engaged, and, most importantly, beneficial impact on the University’s mission of teaching, research, and service. 

Charitable Endowments and Legislative Headwinds in Washington, D.C. 

Princeton’s ability to seize new opportunities, and the excellence of its existing scholarly and teaching enterprise, also depend critically on the University’s endowment. The existing endowment leverages additional gifts that we receive through Venture Forward, enabling Princeton to attract and support outstanding faculty members, move boldly into new areas of scholarship and research, and make its undergraduate and graduate programs affordable for every student we admit. 

I want to say a bit more about the endowment because it is crucial to understanding the University’s budgetary outlook and because it is now the subject of worrisome taxation proposals that result partly from misunderstandings of what endowments do. 

Even sympathetic Princetonians sometimes ask why the University must continue to raise money when its endowment is so large. (At the end of the last fiscal year, in June 2024, the endowment’s value was $34.1 billion, down from a high of $37.7 billion in 2021.) People who raise this question sometimes assume that an endowment is like a savings account and that universities can “dip into it” to pay for unexpected needs or special projects, such as the COVID testing laboratory that we established during the pandemic, a new quantum science facility, or a dormitory renovation. 

“Princeton’s ability to seize new opportunities, and the excellence of its existing scholarly and teaching enterprise, also depend critically on the University’s endowment.” 

An endowment is nothing like a savings account. It is more like a retirement annuity that must provide income every year for the remainder of the owner’s life. At a university, endowment pay out must cover a portion of the operating budget every year for the rest of the university’s existence — and we hope Princeton will live for centuries. 

Princeton’s endowment pays out more than 5% of its value each year. (The pay-out rate for the current fiscal year is 5.4%.) Those transfers account for more than two-thirds of the University’s annual operating revenue each year. They undergird every aspect of the University’s operations: faculty and staff salaries, financial aid, graduate stipends, building maintenance, athletics, libraries, laboratories, computational infrastructure, alumni relations — everything. 

That is why neither our University nor others can simply “dip into the endowment” to pay for new initiatives. Universities are already spending from their endowments every year to pay for existing operations; indeed, the gifts that create endowed funds almost always stipulate that they must be drawn down every year to support scholarships, professorships, or some other designated purpose. Our financial model requires skillful endowment management along with a resolute commitment to trim unnecessary budgetary costs. To state the obvious: absent additional fundraising and investment income, if we expend an amount equal to 5% (or more) of today’s endowment value year after year into the future, then the entire University endowment, no matter how large, will be gone in 20 years or less. 

Thanks to a combination of wise stewardship, donor generosity, fiscal responsibility, and favorable economic circumstances, Princeton’s endowment has grown substantially over the last several decades. For example, when I graduated from Princeton in 1983, tuition revenue and endowment pay out accounted for roughly equal shares of the University’s operating revenue. The transition to an endowment-driven revenue model over the past four decades has transformed every aspect of Princeton, making a great university even better. 

The most obvious changes relate to undergraduate financial aid. Princeton made national headlines in 2001 when it became the first university to replace loans with scholarships so that students could graduate debt-free. At the time, only 41 percent of students were on financial aid — as opposed to 71% in this year’s entering class. 

The average scholarship grant for students in the Class of 2028 is $73,000, which exceeds Princeton’s tuition price by more than $10,000. (Some aid packages cover all or part of room and board in addition to tuition.) Nobody is required to take out a loan to attend, and about 89% of students graduate debt-free. That is the endowment and Venture Forward at work: neither Princeton nor any other university could make its education so affordable if its budget depended heavily on tuition revenue. 

Princeton also aggressively improved its support for graduate students when it announced its historic reforms to financial aid in 2001. The University substantially increased stipends, summer support, and healthcare benefits, thereby transforming the financial foundations for graduate education at Princeton. 

In 2022, Princeton announced an average 25% increase to graduate stipends in all fields, and in September of that year we revealed another round of major improvements to the University’s undergraduate financial aid program. These endowment-supported enhancements to graduate student stipends and undergraduate scholarships were comparable in size and budgetary impact to the trailblazing changes that created the no-loan program in 2001. 

The endowment’s growth, together with fundraising, also permitted the University to make bold investments in faculty salaries, which lagged behind inflation badly during the 1970s and 1980s. It enabled the University to supplement funding from the federal government and other outside sponsors to meet the rising cost of research programs capable of producing scientific breakthroughs, addressing urgent societal needs, and enhancing American prosperity and security. It allowed Princeton to fortify its budget for repair and improvement of the University’s buildings and grounds so that it could properly maintain the campus that its students, faculty, staff, and alumni so cherish. 

The University’s endowment-driven budget model also means that our financial planning must be sensitive to changes in the endowment’s performance and prospects. The anomalous 46.9% return achieved in fiscal year 2021, when the economy rebounded from the pandemic, has now been offset by two years of investment losses and a return below 4% last year. (As a reminder, our budget model presupposes that the endowment will pay out around 5% on average even in years where investment returns are negative.) 

The swings during this four-year period were extreme, but our financial planning anticipates significant volatility. Princeton’s endowment and budgetary models focus on the long term, and we assume that markets will have weaker years as well as stronger ones. It is not surprising that the massive gain in 2021, which in effect pulled forward earnings that would otherwise have been booked in later years, would be followed by a series of more muted returns. 

We cannot, however, assume that long-term returns will be as robust as those that university endowments have seen over the past two decades, when Princeton’s returns averaged 9.9%. Indeed, the long-term returns of endowments have trended slowly but steadily downward for the past three decades as more institutions have competed for the best investments. The investment opportunities of the coming years will inevitably differ from those of the past, and there will be an even larger variety of organizations pursuing them. 

Despite these uncertainties, Princeton’s financial condition remains strong. Our resources permit us to sustain the excellence of our existing programs and to pursue new scholarly fields and projects. To do so, however, we will have to be clear-eyed about our priorities, we will have to trim unnecessary costs and be efficient in our management of resources, and we will have to continue to raise funds for initiatives that matter to the University, the country, and the broader world. 

We will also have to continue to explain the University’s mission and operation to the Princeton community, lawmakers in Washington, and the American public. As I observed earlier, few people understand how endowments work and the public benefits they create. Misunderstandings about university endowments may have been one factor that led to the unprecedented creation of a federal tax on them in 2017. The Tax Cuts and Jobs Act imposed a 1.4% tax on endowment investment earnings. It thereby breached a long-standing and beneficial American tradition that exempted from taxation the earnings on charitable endowments, consistent with the philosophy that in this country we don’t tax nonprofit schools, hospitals, churches, and other purely charitable enterprises. 

There is now discussion about increasing the tax, and some proposals would raise it substantially. I am devoting larger amounts of time to Washington, and I am working with colleges, universities, and other allies to explain to members of Congress and other policymakers why a larger endowment tax would damage higher education and our country. Endowments at America’s leading research universities support world-leading teaching and research programs that strengthen the nation’s economy and enhance its security. If endowments are routinely subject to threats of confiscatory or punitive taxation, it’s much harder to make long-term commitments that depend on annual endowment spending, such as expanding financial aid or investing in emerging areas of science that are critical to the nation. 

The case against the endowment tax depends on three simple propositions, and I hope that you will join me in making the case on behalf of Princeton and other colleges and universities. First, colleges and universities put endowments to use every day, spending at rates that usually approach or exceed 5 percent. Second, that spending is essential to make education affordable and to pay for high-quality research and scholarship. Third, affordable education and world-class research benefit America by bolstering the country’s economy and making our nation more secure. 

Restrained Institutional Speech — But Not Silence — and Expanded Transparency 

When I go to Washington, I not only speak about the endowment but also invite questions from legislators about Princeton and other universities. Many have questions about topics such as free speech, antisemitism, and political bias. I am proud of the campus climate at Princeton, and I believe strongly in the value and quality of American colleges and universities more generally. I welcome the opportunity to talk about them. 

Rarely, if ever, has it been so important for university presidents to speak up for higher education. It is also, of course, an unusually fraught time for university presidents to make statements. Critics pore over presidential messages looking for errors, bias, or other rhetorical sins. 

There are many reasons why universities and their presidents should exercise restraint when speaking publicly. As I told our entering undergraduate students this fall, it is not the university president’s job to tell students, faculty members, or staff what to think about the issues of the day. On the contrary, my job is to ensure that people on this campus have the freedom to say what they think, and to encourage them to engage with, and learn from, one another. 

Colleges and universities, moreover, depend upon support from the surrounding society. Our mission requires that we enjoy autonomy over academic decision-making and that we have the resources required to educate our students and pursue our scholarly mission. Americans’ willingness to grant these benefits depends on their confidence in the integrity of our truth-seeking mission and the quality of our teaching and research. That faith is put in jeopardy when universities or their leaders appear to act in ways that are partisan rather than scholarly. 

These risks are heightened in today’s polarized political environment, in which Americans divide into opposing political camps that too often treat one another with suspicion and enmity. For that reason, as I also said when addressing our entering undergraduates in August, while I have issued statements only rarely in the past, I expect that I will do so even less frequently in the future. 

The advent of new platforms for instantaneous communication — from mass e-mails to blogs to social media channels — has increased the opportunity and the demand for statements from academic leaders about current events. At Princeton, we have been parsimonious by comparison to many other universities about issuing statements and very careful about how we do it. Nevertheless, in today’s polarized political climate, it behooves us to be even more restrained in the future. 

I will accordingly try to avoid online posts or campus-wide e-mail messages about public affairs or world tragedies. Rare exceptions are inevitable: I doubt, for example, that any university president could avoid commenting after an event comparable to the 9/11 attacks on the World Trade Center. 

At the same time, I will continue to speak up vigorously and often for the values of this University, including scholarly excellence, truth-seeking research, academic freedom, free speech, diversity and inclusion, and the importance of a liberal arts education that prepares students not only for their careers but for lives of service and citizenship. Where possible, I will use scholarly channels or long-form writing such as this annual letter, formal addresses, essays, or op-eds; where appropriate, the University may use social media channels to publicize these messages. 

This policy of institutional restraint requires university leaders to make contestable judgments: to explain, defend, and uphold the values of their universities, presidents must occasionally comment on current events or make statements that some will deem political in character. In our divided and sometimes angry polity, criticism is inevitable. 

The worst choice, however, would be to remain silent. University presidents — and, indeed, all of us who care about higher education — need to speak up for the value of teaching, research, and a college degree. We need to describe and defend the vital, vibrant activity taking place on our campuses. We need to explain why diversity and inclusivity are essential to the excellence of our campus communities and the achievement of our educational mission. We need to acknowledge our errors or shortcomings candidly and address them promptly, but we also need to push back against anecdotes and arguments that paint misleading pictures of our institutions and our aspirations. 

To speak effectively, we will need not only to be forceful in our rhetoric but transparent about critical facts. I believe that higher education has a good story to tell, but we cannot expect that people will simply trust us. For that reason, Princeton was one of the first private universities to endorse the bipartisan College Transparency Act, which would provide families and the government with more data to judge the value of investments they might make in higher education institutions. The College Transparency Act applies to data such as enrollment, completion, and post-college earnings. 

Spotlight on Princeton’s Belonging and Inclusion Data 

I am proud of Princeton’s commitment to voluntarily disclose some climate data of another kind that universities rarely share. Our Diversity, Equity and Inclusion Annual Report, also to be released this week, includes data each year about whether members of the graduating class would recommend Princeton to a high school senior with their “same background, ability, interests, and temperament.” We break down these data by race, ethnicity, and sex, among other categories. 

This is sensitive material. It shows disparities in the student experience across demographic groups at Princeton. I expect that these disparities exist at most American universities, but I am not aware of any other universities that share their data publicly. Until recently, Princeton did not do so, either. University administrators quite reasonably worry that the data might be misinterpreted, or that—whether correctly interpreted or not — it might provoke complaints from campus groups, adverse comparisons with other institutions, or criticisms that target student groups by blaming them for their own dissatisfaction. 

The risks are real, but the data inform the work that we and other universities do to enhance the inclusivity of our campuses. I am proud of the quality of the campus life that Princeton offers to all its students, but I want to see all our students thrive. The disparities in satisfaction levels show where we have opportunities to improve what we do. 

The purpose of our diversity and inclusivity programs is to ensure that everyone has the support they require to benefit fully from the education that Princeton offers and feel that they belong fully to our community. We want all our students to feel — as I said in a previous letter, quoting President Bill Bowen’s comment about the Center for Jewish Life — that they are included on this campus as hosts, not just as guests. Princeton conceives of diversity broadly, and our inclusivity efforts address a wide variety of needs and groups: religious groups, different races and ethnicities, LGBTQIA+ students, military veterans, students with disabilities, and students who are from low-income families or first in their family to attend college, among others. 

Diversity, equity, and inclusion programs have, however, become intensely controversial and heavily regulated. Too often debates about this topic are grounded in anecdotes or surveys of dubious value. 

“We have better data, and we need to share it.” 

We have better data, and we need to share it. In the appendix to this letter, I include graphs showing data about undergraduate students’ satisfaction with their education, their willingness to recommend Princeton to others, their sense of belonging on campus, their sense that Princeton students treat one another respectfully, and their feeling about their ability to express their true opinions without being unfairly judged. 

The data paint a complex picture of matters that are too often oversimplified. For example, politicians and journalists have expressed understandable concern about the experience of Jewish students on college campuses. I recognize that antisemitism is rising in this country and on college campuses; that is unacceptable, and we must respond vigorously. 

At the same time, Princeton’s Jewish students report some of the highest levels of belonging of any group on the campus. That was true even during the protest-filled months of 2023-24. (These numbers are, of course, averages, and they must not erase the divergent experiences of individual students.) Other groups, including Muslim students, report lower levels of satisfaction. Both Jewish and Muslim students reported heightened concern last year about the possibility that they would be judged unfairly for expressing their opinions. 

Another much-discussed topic pertains to viewpoint diversity on college campuses. I have accordingly included slides that disaggregate student responses on the basis of political self-identification. Once again, the data describe a complex landscape. For example, students who identify as “conservative” report rates of belonging comparable to those of more liberal students, but those who identify as “extremely conservative” report lower rates of belonging and higher rates of concern about whether they will be treated respectfully. 

These data matter because we want all students to thrive at Princeton and feel that they belong here. We also believe that ours must be a community where all members can speak their mind and where they engage in civil and respectful dialogue, even on — indeed, especially on — difficult topics. We pay attention to survey results because they inform our ongoing commitment to support our students and improve their experience. 

Nevertheless, as I noted earlier, the risks of disclosing these data are real. Some people may misinterpret the results or try to use them against us. Sometimes, moreover, the data will reveal genuine problems that we need to acknowledge and confront. 

All of this will require hard conversations — but difficult discussions are essential to the defense of our mission and policies. They are also the core of what universities do: we insist that even the most sensitive topics be examined on the basis of facts and careful analysis. 

This process of criticism and response, like the construction projects that I described earlier, is part of Princeton’s commitment to improve itself. President Bowen liked to say that Princeton is “always under construction.” His comment referred most literally to the bricks-and-mortar projects that were always underway somewhere on campus, but I have no doubt that his meaning was more general: it encompassed efforts to pursue new fields of research, forge connections to new partners, attract talent from all groups, and ensure that all faculty, staff, and students have the opportunity to thrive at Princeton. 

Princeton is always under construction because, however good we are, we must aim to be better. 

I am grateful for your many contributions to that effort. I look forward to continuing our work together as we celebrate fresh beginnings and remarkable achievements, rise to meet difficult challenges, and energetically pursue this University’s mission of teaching, research, and service in the year ahead. 

[1] “Princeton welcomes Class of 2028, growing transfer student community,”  https://www.princeton.edu/news/2024/09/04/princeton-welcomes-class-2028-growing-transfer-student-community