Harvard may be the nation’s wealthiest university, but it is short on cash.

The school relies on its endowment to generate a third of the money for its operations, and the endowment is on the verge of posting its biggest loss in 40 years. With much of its money tied up for the long term, it is scrambling to meet some obligations.

Harvard has frozen salaries for faculty and nonunion staff members, and offered early retirement to 1,600 employees. The divinity school has warned it may not be able to cover tuition for all its students with need, the school of arts and sciences is cutting its billion-dollar budget roughly 10 percent, and the university president said this week than the unprecedented drop in the endowment was causing it to delay its planned expansion, starting with a $1 billion science center, into the Allston neighborhood of Boston.

The school has even added to its debt by issuing $1.5 billion in new bonds, its largest such offering ever.

Turning the ship around turns heavily on Jane Mendillo, who took over the Harvard endowment on July 1  which in hindsight looks like the worst possible moment to step into a job once held by some legendary investors. The endowment, the largest of any university in the nation, has shrunk by at least $8 billion, to $29 billion, since she arrived.