Tilghman said in an e-mail to Princeton students, staff and alumni that the endowment - valued at $16.3 billion in June 2008 - could fall by about 25 percent by June 2009.
The university taps the endowment each year for close to half of its operating budget; the current operating budget is $1.3 billion, with $535 million of that from the endowment. Tilghman said she wants to take $50 million less from the endowment next year.
She also said that financial aid would be increased to continue the school's trailblazing policy of meeting each student's full financial need with grants. And for those who pay full tuition, Tilghman is asking the board of trustees to approve tuition and fee increases of 2.9 percent.
To save money, Tilghman said the school would hold down the number of visiting faculty, cut non-personnel administrative budgets by 5 percent, cap pay increases for tenured faculty and the highest-paid administrators at $2,000. Other measures are also being studied, ranging from printing fewer documents to charging more rent for outside groups who use university facilities.
Also, the university said that construction projects under way now will continue, but that the start of some being planned might be delayed.
The university is also asking faculty, staff and students to suggest other ways to cut costs.
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