So can we expect tuition & COA to decrease in the upcoming years ?
Probably not for full pay in an inflationary environment. But it’ll help bring in more need-based scholars and improve their funding.
Fortunately, tuition only increased about 2.8% this academic year over last, and last year’s tuition didn’t increase over the prior year.
Lol, Yale’s endowment gain in 2021 was $12.1 billion. The flip side is why anyone would want to contribute their measly couple of hundred or even thousands of bucks now.
Yeah, UChi’s 37% return might be a tad on the low side compared to some others. MIT earned a 55.5% return!
It can be helpful to compare the endowment return to other types on investments. For example, during the same 1-year period, the S&P 500 increased by 41% and the NASDAQ increased by 47%. It seems most of the larger college endowments increased by a similar amount as larger index funds. Harvard was on the low side at 34%, most other Ivies were around 40%, and MIT was high at 55%.
In the preceding FY 2019-20, SAP was up 2% and NASDAQ 20%. Endowments generally fell somewhere in between, with most of the larger endowments around 6%. Again MIT was on the higher side, at 8%.
I’m not especially familiar with what makes MIT endowment investing unique compared to other larger endowment colleges.
Maybe spend more money on campus/off-campus security.
Unfortunately, a patrol officer at every intersection wouldn’t have prevented the very bold robbery and shooting that happened today.
Patrol officer? How about multiple patrol officers? How about high def video equipment at every nearby corner and street? How about speed bumps the size of whales, or roundabouts to slow down getaway vehicles? How about closing the streets down period?
And it’s just not about just this one murder. Stepped up police presence along with other measures could prevent crime around campus, even if it’s one future life.
I’d spend more money, because UofC will see more or more potential applicants go elsewhere.
They have surveillance cameras at every corner. There are whale-sized speed bumps throughout Hyde Park. That area is heavily patrolled. And the particular neighborhood, like others, has a very difficult-to-navigate exit precisely for the reason you are implying. Westbound (the direction of the getaway car per the local CBS reporter) consists of several turns and one-ways leading away from Cottage Grove, the main getaway road for that part of the neighborhood. It was 2 pm - usually a heavy foot traffic time of day with lots of people out and about and many indoors who heard the noise and came running out into the street. No university security measure would have prevented this atrocity because the perps were either cruising the neighborhood looking for just the right moment to strike (and knew how to exit quickly despite the difficulties) or had targeted the victim and were slowing following w/o the latter’s knowledge. It was the second shooting that day in Hyde Park, as a congressional candidate was targeted earlier in a drive-by several blocks east in front of multiple witnesses who got the description of the car and license plate (stolen vehicle). No one was killed or injured in that one, fortunately.
Closing the streets altogether would help but that’s a city council decision. The university has restricted auto traffic immediately around and on campus, but the neighborhood of Hyde Park itself is home to many residential and commercial residents who rely on the ability to drive through in order to get to work or to shopping, etc.
EDIT to add: Unfortunately, shooting death #2 this year happened on the CTA Green Line during commuting hours. Shooting death #1 happened in a well-secured and guarded garage of an expensive high-rise apartment complex. All seemingly random acts of violence. None prevented or preventable by the remedies you suggest.
UCPD has a pretty visible presence not only on campus but in Hyde Park and the areas beyond; from Bronzeville to South Shore. Their charter (granted via state law) allows them an expanded patrol area and an ability to work with CPD. They are a genuine (private) police force, not a security service. UCPD has also been the subject of massive protests and an attempted occupation of their HQ in 2020 for their “policing.” And, unfortunately, there has been a solid and positive correlation between the scrutiny and restriction on city “policing” (CPD and other forces) and a spike in violent crime. Right now, police departments in many large cities aren’t exactly booming with candidates, and many current officers are retiring, going on sick leave, or just plain quitting. Why be a police officer if you might find yourself charged with murder and put away? Too risky, especially in a high-crime city such as Chicago (and, now, Minneapolis).
UChicago has been very clear that UCPD isn’t going anywhere but, like everyone else in the city of Chicago, the university depends on the city and its police force to help keep order. That has been breaking down the past couple of years.
That is something that many who are attracted to a top university will have to consider. For the rest of us, we have to figure out how to help keep our kids safe in an increasingly unsafe locale.
All of these universities probably have a section on their endowment portfolio in the annual report. I recall UChicago’s is (or was) skewed toward international investments a couple years ago. There is a recent WaPo article explaining how financiers on the boards of some of these larger elite universities provide proprietary investment opportunities not generally available to others (including smaller institutions) and the resulting inequities, so anyone’s welcome to google that and read (not providing a link because it’s behind a paywall).
Also - at least in UChicago’s case - the growth reflects the impact of fundraising. They completed a very large and multi-year capital campaign about two years ago now, so many pledges are coming in from that. That’s an addition to basis that reflects something other than investment strategy.
If they didn’t catch a license plate or faces, then more, and better, cameras, video equipment and employees in a video room at UCPD.
I have a family member who struck the university from her list because of safety concerns. It’s definitely on people’s radar. JHU suffers from the same issue.
If there are no security measures that can be added or enhanced, with all those billions, then it’s now all about “acceptable losses.” Sad.
They did catch the license plate. It was from a car stolen the day before. UCPD has significant resources, it’s very evident on campus.
This is my number one concern for my son, but he has felt pretty safe so far.
Back to the main topic, university endowments reaped huge gains this past year. I believe Duke was similar to the MIT returns. My big curiosity is to see if this will impact college affordability; are tuition hikes for colleges sustainable?
Given the huge number of waitlisted who would enroll in a heartbeat if offered the chance, the better question might be whether colleges are charging enough as it is? 
Most endowment gains are going to be restricted use. Much of it probably goes toward the affordability goal for both the undergrad and grad schools and will free up colleges and universities to admit who they really want to (rather than sticking to who can pay for it). But full-pay families are also a large part of that picture and will remain so. So colleges and universities will remain committed to the tuition model as long as the returns to an education remain significant and families are willing to pay for that.
From high to low, I believe the returns were as follows. Spending is typically larger in a year with a larger endowment return, but I’d expect that spending is more likely to result in increased sticker price, not decreased sticker price. If the higher endowment leads to increased legislative pressure to spend a larger portion of endowment, then it can encourage colleges to rebalance tuition revenue sources by income, which can involve increasing both tuition (faster than inflation) and increasing FA.
The FA spending goes up, making the college similar or lower cost for middle and lower income kids, so the net tuition revenue coming in from lower and middle kids decreases, in spite of the increased sticker price. And the net tuition revenue coming in from wealthy kids increases since they are paying the higher sticker price. The overall tuition revenue from all students is similar to previous years, but the university is spending a larger portion of their endowment. If you look at inflation adjusted average net cost, it has been largely flat over multiple decades at many of the private colleges listed below due to something similar to this description.
WUSTL, which has the highest return of those listed below is a special case, since it was in the process of moving to be need blind prior to the large market gains of FY 21. WUSTL says they have earmarked $800M towards going need blind and increasing FA for undergrads. They did not mention any plans to reduce their $80k sticker price.
FY 2021 Endowment Returns
High / Better Than Market Indexes
WUSTL – 65%
Vanderbilt / Bowdoin – 57%
Duke – 56%
MIT – 55%
Brown – 52%
Williams / U VA – 50%
Low / Worse Than Market Indexes
Columbia – 32%
Harvard / Cal – 34%
U Texas – 35%
Chicago – 38%
Stanford / Yale – 40%
They might have prevented tragedy if security officers paid attention to someone wondering around the streets.