3 ms·

It’s funny, if they earn 2% per year that’s $640M. With 12k undergrads at $60k, that’s $720M. Seems like they should just stop charging tuition altogether.

• bilbo0s 5y ago
  That's not how endowments work. I'm 99.9999% positive that what you suggest would be illegal, and would land the administrators in prison. As a lawyer once explained it to me, if person X gives organization Y some amount of money Z for purpose W, then spending even a penny of Z on purpose Q is felony fraud. I could be wrong, but that's how it was explained to me.
  • kristjansson 5y ago
    Restricted gifts exist, but it's wrong to state categorically that the existence of restricted gifts precludes spending any endowment income on tuition. GP is also simplistic - not all the endowment income is available to cover operating expenses - but is directionally right. Lots of scholarships and the like offered by schools are transfers from the endowment to the operating budget mediated through a 'lower' tuition bill for the student. A relevant number to look at is the average income per student (money + loan proceeds) to the school - usually that's much, much less than the stated cost of attending.
  • prepend 5y ago
    I’m sure there are exceptions based on the gifts, but I doubt all $35B have such restrictions. Also it seems odd that a large number of donors would have restrictions that prevent covering tuition and expenses of teaching.