Director Pat Byrne says the Smallwood Foundation's endowment fund has encountered the same problems as most other investments. (CBC)

The global economic crisis has forced the cancellation of key scholarships offered at Memorial University of Newfoundland.

The J.R. Smallwood Foundation for Newfoundland & Labrador Studies, which was set up in the name of the late premier, has said it cannot afford to distribute scholarships to graduate students this year.

Director Pat Byrne said the funds in the Smallwood endowment have fallen below a sustainable level, meaning that the current competition — which had had a deadline of March 1 — has been cancelled.

"Right now, everybody and every fund are all in the same boat," Byrne, an English professor, told CBC News.

"We're perhaps small potatoes, you know, compared to the big car companies and the big financial institutions and so forth, but for the student who is six months away from a degree and needs to get this research done in order to graduate at a certain time [and] to get a thesis prepared, it's very serious."

Anthropology major Samantha Breslyn, who is working on a thesis about traditional music, had been hoping to win a scholarship so she could conduct research on Newfoundland's Southern Shore.

"I spent, basically, the last two months in the library working on a proposal and doing editing to get it done in time," she said.

"It's unfortunate. The bigger picture is always better research — you get a better understanding."

Memorial University's acting president, Eddy Campbell, recently warned alumni that the financial crisis has had a direct hit on the university's endowments. Interest from those funds are typically used to pay for numerous scholarships and academic awards.