<p>Although the official numbers have not yet been published, I hear that Michigan's endowment has grown by 10% in the past 12 months, from $7.7 billion to $8.5 billion. I am not sure if this is accurate, or how it compares to peer institutions, but it certainly is a solid performance considering general market trends and performance over the past 12 months. I expect our endowment to remain the 6th largest among all US universities, tied with Columbia.</p>
<p>Official figures will likely be released sometime in late September.</p>
<p>I believe the market rebouding is the main reason for the growth. I assume most endowments at major universities should be up nicely this year. There has not been a capital campaign in Michigan for a few years now. That will be changing in the near future. Michigan should be looking for a substantial increase in contributions at that time.</p>
<p>This is a result of improved market conditions. Michigan Endowment money managers are obviously more than competent, but like any university, Michigan handles its endowment conservatively. This said, Michigan’s endowment has grown faster than that of any other university in the nation in the last 25 years. In 1987, Michigan’s endowment was not among the top 25 in the nation. Today, it stands at #6.</p>
<p>“The forthcoming campaign will likely last between five and seven years. Its focus will be distinct from the Michigan Difference, with an eye toward people and scholarships and less on buildings (there were 22 building projects in the last campaign).”</p>
<p>* If the endowment is so great why is the tuition increasing at such a fast rate? *</p>
<p>I wish I knew the answer to this too. I think that the high tuition rates for OOS are being used to help subsidize a large portion of the in-state tuition rates (as evidenced by the increase gaps between in-state and OOS), but, honestly, I’m just guessing.</p>
<p>* Where are the scholarship increases to OOS students entering the University? *</p>
<p>Money can be found, if you know where to look… :)</p>
Contributions have increased significantly. That said, the additional contributions don’t even come close to adding an extra 800 million to the endowment. I think the real credit has to go to Slottow and Lundberg. They’re huge assets to the university and they’ve done some extremely impressive things over the last couple of years.</p>
<p>
The cost of attendance for the average student at Michigan has actually been increasing at a rate less than inflation. Part of this is due to aggressive cost control, and part of it is due to a shift to new revenue streams.</p>
<p>
Michigan has recently begun to meet 100% need for very low income non-residents. Assuming Michigan’s next capital campaign is a success similar to the first one, we should expect to see Michigan’s OOS aid to become more generous.</p>
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Bingo. The subsidization has been going on for quite awhile. I honestly don’t think that this practice is in the university’s best interest, but I do understand the reasoning behind such a decision since they’re trying their best to avoid criticism by keeping resident costs as low as possible.</p>
<p>* I honestly don’t think that this practice is in the university’s best interest… *</p>
<p>Well, like you said, it’s being fair to the residents who are inadvertently paying tax dollars to help support Michigan (though they aren’t that dependent on state funds). If I was a Michigan resident, I’d be happier to pay taxes provided the payments would eventually allow my children to attend Michigan at such a discounted rate.</p>
<p>Just to be clear, Michigan has about 10 million residents, and the state’s contribution to the university this year was somewhere in the vicinity of $270 million. That means the per capita state tax contribution was about $27. I’d say if you’re a Michigan resident and you get to send your kid to the University of Michigan, you’re getting an extraordinary return on your tax dollar, considering that in-state tuition is roughly $30K/year less than the OOS rate. And this is true even if you’ve been contributing through taxes year in and year out throughout your life, even in years when you didn’t have a child attending college.</p>
<p>I actually saw that the endowment was 8.455 billion first on UM’s wikipedia page the other day. Thought it was a mistake since I tried googling around to see if it was true, but I’m glad that it is.</p>
<p>I checked it out and you are correct ForeverAlone. The $8.455 billion figure is broken down into “Marketable Securities” based on April 2013 market value and “Alternative Assets” based on December 2012 market value. It is very likely that the final endowment figure based on June 30 market values will be slightly higher, probably around $8.6-$8.7 billion.</p>
<p>Of course, none of that means anything until we know how other university endowments performed, particularly Columbia, UT-Austin and Northwestern, the only three endowments that come close to Michigan in terms of market value.</p>
<p>I think large tuition increases at all universities have been prevalent for the past couple decades largely because of two reasons:</p>
<ol>
<li>There was enough people willing to pay — simple really – extract every dollar possible</li>
<li>In a perverse way, universities were actually be rewarded by having high tuition. Uninformed people often wrongly perceive low tuition as low quality and high tuition as superior. Think of all the Michigan residents who would rather pay for large private (non-Ivy) school tuition OOS than get a great deal instate at UM. Same thing happens in California. Also, rankings reward universities with better resources. One way to increase resources is to charge more.</li>
</ol>
<p>I think with the past recession, people are now starting to realize that it’s okay to seek a bargain and scrutinize costs, and universities are realizing that costs have to be controlled (particularly since the free ride on federally subsidized student loans might come to an end). </p>
<p>At least in the near future, I think universities will start to reign in tuition increases if they want to remain competitive (or at least give massive financial aid).</p>
<p>Subsidizing in state students by “overcharging OOS” - not limited to Michigan. The UCs have been doing this for a long time. Also, 1.1% increase is pretty low. Do not know the exact number but the UCs have far outpaced inflation in terms of increases to tuitions. All that being said, the quality of education that you get at a UC for the price that we pay even today, is a pretty good deal. The issue is that the common app and the population make it ridiculously hard to get in & and graduate in time. Apologize for taking this on a tangent</p>