Boston ? Harvard University is considering spending cuts because the economic slowdown may reduce federal grants and the school’s substantial endowment, President Drew Faust said Monday.

Harvard’s endowment posted an 8.6 percent return and grew to $36.9 billion in the fiscal year that ended June 30. The school, however, lost 12.7 percent on its U.S. stock portfolio and 12.1 percent on its foreign equity portfolio during that time. Faust’s spokesman on Monday declined to say how much the endowment has lost during the current economic turmoil.

Harvard’s is the nation’s largest university endowment and provides about a third of the annual operating budget. Faust said the school is looking at ways to cut spending and will review compensation costs, which account for nearly half of the budget.

Harvard also is reviewing its ambitious expansion program, including plans announced early last year to expand across the Charles River from its Cambridge campus into Allson, she said.