Are College Endowments Safe?

With endowments suffering, scholarships are harder to come by. Here’s what you should know…

Colleges and universities typically manage an endowment fund which goes to fund some of its operating requirements (or other requirements, such as capital).

Schools may also control any number of ‘restricted’ endowments, aimed at funding specific areas within the institution, like endowed professorships and endowed scholarships / fellowships. (Private colleges and universities sometimes rely heavily on its endowments in their operating budgets, whereas public schools tend to rely on state or local governments for funding.)

And when you look at the endowments at today’s colleges and universities, the numbers are mind boggling. Scores of colleges have over a billion dollars in their endowments, and hundreds more have hundreds of millions.

That’s AFTER considering a recent study’s conclusion that colleges and universities suffered their worst year since the Great Depression!

The National Association of College & University Business Officers (NACUBO) and the Common-fund Institute found that colleges and universities had an average loss of 18.7% in the year ending June 30, 2009.

What’s more —

1.     Endowments are invested in a number of financial instruments. And, like the rest of us, colleges took a big hit the past few years. Most have seen around five years of gains wiped out. Now, they’re playing it a little safer, trying to rebuild their worth.

2.     The size of a college’s endowment goes to a number of things – with a shrunken pot and a tighter grip on remaining cash, many projects are going unfunded. That means (potentially) fewer new buildings and fewer supplies for students.

3.     Most importantly – much of a university’s grants and scholarships come out of the endowment. Those that are earmarked are safe (for the time being perhaps), but any discretionary money could be in danger.

What A Shrinking Endowment Means For You:
The Parent and College-bound Student

Considering the hits that everyone has taken the last few years, it’s safe to say – more people are fighting over pieces of a smaller pie.

That means you need to work even harder to set yourself up for the maximum amount of college funding. Here are a few good places to start.

First, you should reduce your Expected Family Contribution. The lower your EFC goes, the more money you’re eligible to get.

You also need to know how others are fighting for every last dollar – and how you can grab yours.

It can’t hurt to keep your college costs as low as possible, as well – if there’s less money out there, needing less is a great solution.

What’s more – why pay the full sticker price if you can go to college at a discounted rate, as well?

Finally, with endowments hurting – or at the very least, uncertain – and with the government looking to save money however it can, it’s in your best interest to know how to increase your funding from private scholarships.

To your successful college search,

Scott Weingold

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News,, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.