Harvard University says it is considering spending cuts because the economic slowdown may reduce federal grants or the school's substantial endowment.

In an e-mail to faculty, staff, and students Monday, school President Drew Faust said Harvard needs to prepare for "unprecedented endowment losses and plan for a period of greater financial restraint."

Harvard's endowment was valued before the current economic downturn at $36.9 billion. It is the nation's largest university endowment and provides about a third of the annual operating budget.

Faust said Harvard was looking at ways to cut spending and may curtail expansion plans. She gave no detail what cuts are being considered. Her spokesman declined further comment.