WATERVILLE -- The financial crisis on Wall Street has reduced the value of Colby College's endowment, which peaked at $630 million last year, by more than 25 percent, according to Colby President William D. "Bro" Adams.

But Adams said Colby remains committed to its policy, started last year, to eliminate loans as part of its financial-aid packages to students, a move that means most Colby students avoid $14,000 in debt over their four years at the college.

Colby's current comprehensive fee -- primarily tuition, room, and board -- is $48,520.

"We want very much to continue our commitment to that enormously important step," Adams said in his recent annual state of the college address. "At this point we think can do that."

Adams also assured a Family Homecoming Week audience that Colby has weathered the financial storm in relatively good shape.

He said the college is a conservative organization on almost every financial front and that conservatism has been a blessing. "Right now and in every way that matters, I'd offer a positive statement," he said, "that the circumstances of the college are stable, that we have every expectation to continue to meet our essential obligations and commitments ... though even as I say that I'm aware there is a likelihood we are going to feel some kind of constraints going forward."

Adams said endowment money accounts for 18 to 19 percent of its annual spending.

Robert A. Strong, a professor of finance at the University of Maine, sees Colby's situation as probably being typical for private colleges with large endowments.

Strong said most should be able to function as normal for the most part.

"Once you have a down year or two that is when you start to reduce the amount you pay out," he said. "A lower payout is likely next year, but I don't see that it will be systemic."

Strong said colleges typically spend up to 5 percent of a three or five-year rolling average of their endowment's value.

By taking that approach, he said, colleges tend to avoid wild swings in the level of endowment spending that might result from a wild fluctuation in value in a given year.

Colby spokesman David Eaton said the college, while committed to its no-loan approach to financial aid, has yet to determine the level of support it can offer students for the 2009-10 school year.

"We just don't know," he said.

Eaton said the board of trustees is the body that gives final approval to the spending plan, a decision made at its spring meeting.

Colin Hickey -- 861-9205

chickey@centralmaine.com