<p>My post about the difficulites of schools that support their budgets with large endowment did not mean they are the biggest concern and we should be sad for them, it is just an interesting paradox that the reduction in investment assets is having a bigger short term budget effect on large endowment schools ( >6bil) while having a smaller effect on med endowment schools (1.5-6 bil) that have not been able to historically fund a large portion of thier budget with earnings. These large endowment earnings have allowed these “rich” schools to spend freely with high salaries, expensive buildings, low faculty ratios etc. These large fixed costs will make it harder for these schools to balance their budgets than the more poorly endowed frugal schools. The lack of liquidity in these funds in not necessarilly poor management but a system that worked to maximize earnings for the last ten years and is what got these schools such high endowments. </p>
<p>The same paradox can be seen in state schools. The flagship state schools have had a high contribution from the state coffers so they will have to endure painfull budget cuts as states face revenue shortfalls that could top 30% in many states. While lower tier State colleges and universities have often had to make due with per pupil budgets that do not greatly exceed the cost of in-state tuition. So it is a bit like the age of the dinosaurs. The kings of the land struggle while the small mammels thrive.</p>