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I think you're getting a bit mixed up here. For example, I went to Harvard, which has a large endowment which has grown substantially. But the endowment definit
by smeyer 12y ago
I think you're getting a bit mixed up here. For example, I went to Harvard, which has a large endowment which has grown substantially. But the endowment definitely didn't grow by moving tuition money into the endowment (it goes the other way around, with parts of the endowment helping to fund financial aid). Endowments tend to grow through donations and hedge-fund style management.
It may be the case that some universities are pulling less from their endowments to cover certain costs, covering those costs with increased tuition, and leaving the endowment free to grow more quickly, but I'm pretty confident that universities aren't just siphoning money from tuition straight into the endowment.
I think you'd have to show that universities are spending a smaller fraction of the earnings from their endowments, rather than just that the endowments are growing.
- mazelife 12y agoI'm not getting mixed up about the direction the money flows; see my quote down-thread: "endowments come from donors by definition" When asking why is tuition growing, I was saying exactly what you state: that for universities that are focusing on increasing the size of their endowments, something has to cover the costs that would formerly have been funded by endowments, that "something" being tuition.
- smeyer 12y agoI misunderstood you; thanks for the correction. I still think the useful data here is the fraction of the endowment income that goes towards expenditures, rather than the raw size of the endowments, but I definitely see where you're coming from. I wonder what fraction of the rise in tuition has to do with this.