Sunday, February 10, 2008

Endowment Hoarding.

Today's Ann Arbor News features a story on the University of Michigan's whopping $7.1B endowment, which has doubled since 2003 (a return of 14.9% per annum). UM keeps raising tuition (7% last year) and begging for more state funding, while spending only $200M of the endowment toward operation of the school.

What is an $7.1B endowment for? How about decreasing the onerous costs borne by students and their families? For example, if the green eyeshades at the U can average a return of half of that for the previous five years, then after budgeting inflation (about 3%) they could still apply the net $320M toward school operations and - gasp! - rollback tuition for 40,000 students by $3000 per student. This would be a decrease of the present tuition and fees by 30%!

No comments: