Growth in colleges' endowments is not bringing lower tuitions

To contact us Click HERE

College and university endowments were hit hard by the recession, but many have recovered well and are posting large gains, according to a report by USA Today. Tuition rates continue to climb, however.

"In 2011, 74 U.S. schools had endowments of more than $1 billion, compared with 54 schools in 2009 after the recession hit," according to data collected annually by the National Association of College and University Business Officials and analyzed by USA Today. "By 2011, nearly 70 percent of schools had either recovered from losses or were within 5 percent of their previous maximum amount. Gains include both investment returns and fundraising."

Endowments comprise money donated to an institution, often by alumni or friends of the school. Interest from unrestricted endowment funds can be used for operating expenses and capital expenses. Frequently, though, endowments come with restrictions made by  their donors, often to created scholarships or endowed professorships.

Private vs. Public helps explain why students who can get in, top private schools such as Harvard, Yale and Princeton can be a better bargain than some state universities for students who can meet their academic requirements. These schools have begun using their endowments to offset tuition costs for middle-class students, prompting talk of a role reversal.

Although some public schools have large endowments, many have little or no money in endowment funds. There are 2,719 four-year colleges in the U.S. and another 1,690 two year colleges, and most have no endowment, said Time magazine, citing NACUBO statistics. Elite schools with multiple billions drive the conversation about lowering tuition through endowments, but the idea isn't feasible for most schools, the report said. Deseret News