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Carusi Gift Delivers Financial Aid During Fiscal Crunch
As economic straits squeeze family finances and financial aid budgets at colleges across the country, Susan and Bruce Carusi '74, P08, and their family, have created a novel scholarship fund that meets urgent financial aid demands now, while also providing assistance to deserving students for years to come.
Aside from the magnitude of the gift, the Carusi Family Scholarships are distinctive because they provide a clever solution to a dilemma that has college financial aid offices across the country scrambling to shore up funds.
First Things First
Traditionally, when a donor makes a gift of an endowed scholarship fund, it is invested as part of the overall College endowment in the market for a year or two before it becomes activated. The year or two gives the fund's value a chance to appreciate and enables Holy Cross to use a certain portion of the accrued earnings to pay for the scholarship without chipping away at the principal of the fund. This system worked beautifully in the days when the College could reasonably presume that the market would earn at least 4.5 percent per year, and the necessary income would have accrued for the scholarship to be activated and the objective to be funded. These days, however, the market has proven unpredictable.
Responding to the economic circumstances at Holy Cross, and the realities for many students and their families, the Carusis worked with the College and structured their gift in a novel way which includes two components: an outright, current-use portion, that will fund six student grants for the 2010 academic year, plus an endowment that will take effect next year and help the College meet the needs of future students and their families. The dual nature of the gift helps ensure that students will benefit now and in the future.
"It's clear that endowments everywhere are getting hit pretty hard this year, and families are being hit even harder," Bruce Carusi says. "My wife and I decided, 'Let's do what we can to help these students right away, and then we can move on from there.'"
Tackling Debt
The Carusi Scholarships also address another sobering economic reality facing college students nationwide: the rising tide of debt. "These days, especially, we have to think about how much debt students are carrying when they leave here," says Frank Vellaccio, senior vice president. "In many cases, even if we determine that you can afford to pay $20,000, families are really sacrificing to cover that amount—and taking out significant loans to make it happen." This is of particular concern as tuition costs rise and a tight job market makes it difficult for recent graduates to find employment.
The Carusi Scholarships throw students a line out of that fiscal whirlpool, too. The scholarships will be awarded in the form of grants that effectively erase part of the "self-help" portion of students' financial aid packages, which requires students to take out loans and engage in work-study jobs to help meet the costs of tuition, room and board.
The Only Way Up
As an early partner and managing director at the New York City-based offices of Babcock & Brown, Ltd., a boutique investment banking firm where he worked for 24 years, Bruce Carusi has a sophisticated understanding of the market pressures facing colleges committed to need-based aid.
He and Susan, an attorney, are also keenly aware of the difference financial aid can make in the lives of ambitious students. They created a foundation that supports high school students in their community with exceptional financial need, relieving parents and their children from having to take on additional loans or jobs to pay educational expenses, and freeing students to spend more time focusing on academics.
"We have always admired the Jesuits' commitment to educate everyone who arrives at the door, regardless of whether they can afford it," Bruce Carusi says. "What Holy Cross does with its need-based aid is very important from that perspective. For many people, there is no other way up, and throughout our careers we've seen financial aid make a big difference to people who didn't have the financial means, but who did have the intelligence and the drive to succeed."