<p>Granted we get in to USC, how could we possibly afford it?! With the current economic crisis, and the potentially large decline in student loans being given out, how could anyone possibly afford $50+ k a year?! I mean, USC isn't going to be handing out more scholarships than normal and the cost isn't going to go down... I guess more people will be going to in-state schools?</p>
<p><em>refrain from saying University of Spoiled Children</em></p>
<p>The economy might actually make USC even more attractive relative to other privates or OOS public universities. SC is extremely generous with merit aid, unlike the top LACs and Ivy-type schools. There could be more people now who don't have "demonstrated need" but will find the scholarships very compelling.</p>
<p>But if you don't get merit- or need-based aid, an in-state school might be the most reasonable choice, depending on your own financial situation.</p>
<p>I'm sure this year most private colleges look expensive compare to state school. But if you get aid, sometimes it's cheaper than state school. DD knows somebody who pays next to nothing, I mean a lot less for USC. </p>
<p>USC endowment lost money this year.
Daily</a> Trojan - Amid crisis, endowment takes a hit</p>
<p>I will be shocked if anyone is able to name a single school whose endowment did not take a hit this year. However, something does not add up. The S&P was 1444 on 1/1 and stands at 984 today. All those years of expensive education tell me that this is -31% :D, so I am not sure where the 12% number quoted in the article comes from. Perhaps the interview was done a while ago when the numbers looked better. The stuff about foreign investments doing better also does not add up, since foreign markets have not done any better:</p>
<p>Summary</a> of several stock indices</p>
<p>I call "BS"</p>
<p>Harvard</a> endowment posts solid positive return — The Harvard University Gazette
[quote]
Harvard University's endowment earned an 8.6 percent return during the fiscal year ending June 30, 2008, bringing the overall value of the University's endowment to $36.9 billion.
[/quote]
</p>
<p>USC invests in venture capital funds</p>
[quote]
The university's endowment is invested in about 80 venture capital funds, according to USC's treasurer.</p>
<p>Hannah Kim - The Daily Trojan</p>
<p>The same website students visit to watch "The Evolution of Dance" and popular "Saturday Night Live" sketches just cashed out for USC.</p>
<p>The university will receive $14.6 million for the 30,901 shares it held in YouTube, said USC treasurer Ruth Wernig, who confirmed the university owned those shares.</p>
<p>"We had an investment in Sequoia (Capital), which invested in YouTube," Wernig said.</p>
<p>She added the university has not yet received the money from the shares.</p>
<p>Sequoia Capital manages a venture capital fund that had invested in YouTube, according to the Associated Press.</p>
<p>USC invests in about 80 venture capital funds. The money to invest in these and other ventures comes from the university's endowment, Wernig said.</p>
<p>It was not uncommon for universities to invest endowment money, said Lee Swartz, associate professor in the Marshall School of Business.</p>
<p>"Most private universities have substantial amounts of investment to sustain themselves," he said. "They are continually trying to invest more money."</p>
<p>Without investments, the value of the endowment would decrease because of inflation rates. It would also be possible, however, for investments to fail and not have any returns.</p>
<p>But Swartz said universities are also careful about their investments.</p>
<p>"Private universities have done a good job in the last decade to control risk," he said. "They directly invest in things that go across a lot of different investment styles to diversify."</p>
<p>Swartz named mutual funds, hedge funds, direct investment and venture capital investments as some of the investment options open to universities in order to diversify their portfolios.</p>
<p>Wernig said that USC did diversify its investments to minimize risk. USC invested in venture capital funds and in fixed income investments, which are generally bonds that have a fixed interest rate.</p>
<p>Fixed income investments have a lower risk rate but a lower return rate compared to venture capital investments.</p>
<p>Wernig said the university invests both domestically and internationally. Because of confidentiality reasons, Wernig could not comment further on USC investment ventures, including the recent YouTube investments.</p>
<p>Increasing investment is essential to increasing the endowment of a university.</p>
<p>Five percent of the endowment is spent every year, and the Board of Trustees votes on the percentage of the payout, Wernig said.
[/quote]
</p>
<p>Harvard</a> endowment posts solid positive return — The Harvard University Gazette
[quote]
Harvard University's endowment earned an 8.6 percent return during the fiscal year ending June 30, 2008, bringing the overall value of the University's endowment to $36.9 billion.
[/quote]
</p>
<p>Again, June 30 is one thing, October 10th is a whole different matter. The meltdown is just a few weeks old.</p>
<p>
[quote]
Since 1984, USC has averaged a positive return of approximately 12 percent.
[/quote]
</p>
<p>Not for this year. Average return since 1984.</p>
<p>I don't know how accurate those numbers are, but regardless, it sounds like the endowment is very well invested. </p>
<p>It is possible though that the numbers are correct. For example even though he references the S&P 500 in the article (as the average performance in the "market") it is very likely that USC's investments don't mirror the S&P index (and thus could be hit less hard, especially if they did not choose financial stocks) and so the "potential 13%" hit he refers to would be the total drop in USC's equity shares (not the market index) and the 1.2% drop would be including return from bonds and the like</p>
<p>Since they're investing for the long-term gain, market fluctuations like this don't really affect the investments as much as you might think. Over 15, 20, 25 years equity investments often can really pay off like that, and just eat the losses when the market crashes. It worked for Warren Buffett :)</p>
<p>On the side, I suppose one interesting thing I heard the other day, was that the USC Credit Union has never foreclosed on a mortage in its history - now that's impressive :)</p>
<p>Credit unions usually are pretty safe. According to bauer financial, USC has 4 stars so that is pretty good. Downey Savings had zero star, it was failing. Wamu has 1 star and you know what happened.</p>
<p>CART</a> CONTENTS</p>
<p>Cramer</a> on BloggingStocks: SEC paints a target on Downey and its ilk - BloggingStocks</p>
<p>I don't question the fact that the returns of the endowment do not mirror the S&P 500. I was just questioning the inconsistencies in the statements: that they are down 1.2% but would have been down 12% if they were invested "in US equities". Perhaps I am reading too much between the lines, but the implication above is that they are invested in "non US equities". I was merely pointing out that non-US equities have taken bigger hits than their US brethren.</p>
<p>I agree, it's far too non-specific and vague to read anything certain into.</p>
<p>As far as I can tell, these investment types like to call stocks "equity" (sometimes because often these include preferred stock and holdings in private companies, in addition to stock) so the opposite of "US equity" could be either "US non-equity investments" (i.e., bonds, etc) or "non-US equity" (foreign holdings)</p>
<p>Also, for one thing, private holdings in companies probably have not taken such a hit as publicly-traded companies. I would venture to guess that USC holds some significant equity of companies like Sequoia Capital (given that Mark Stevens is a trustee) and most likely that equity is still strong.</p>
<p>But I'm an engineer, not a finance or business type, so this could certainly be totally off the mark :)</p>
<p>Please forgive me, but I think this discussion has gone off a tangent about the return on the USC endowment, vs. the writer who is concerned about paying for USC tuition when the stock market has plummeted. A lot depends on where you intend to get the money to pay for your child's tuition if s/he doesn't get the full trustee scholarship or if you are income is not low enough to qualify for grants. I hear that loan money is tight too. I think it is going to be tough for a lot of people. Also, I think USC is better, if you can figure out how to pay for it, than state schools (even if the state schools are cheaper) because it sounds like some state schools are going to be hard hit with big budget cuts resulting in very large classes and other activities removed due to budget cuts. It is just going to be hard for a lot of people. If you can afford USC as a freshman, great. If not, you might want to think about a community college and hope the market swings back in the next two years to pay for USC as a transfer student.</p>
<p>Daily</a> Trojan - During crisis, USC funds are largely unscathed</p>
<p>
[quote]
In the last two weeks, hundreds of colleges and universities nationwide have seen their spending power crippled by the credit crisis. But USCs decision this summer to pull investments out of a popular fund that has been particularly hard hit has helped the school escape relatively unscathed.
[/quote]
</p>
<p>USC should have money for aid.</p>
<p>I wish I had the money for USC. 50k/yr. for JUST tuition and board is ridiculous.
I'd rather go into Med/Grad school with no debt.</p>
<p>If you are interested in going to USC undergrad, apply, and if you get in, see what kind of aid you may get (merit, grants, etc.).</p>
<p>GroovyGeek
- You have no idea what USC is invested in. Granted, the claim that IF they invested in U.S. only they would be down 13% is hypothetical, but that does not necessarily mean that they are not being truthful about their investments being down only 1.2%. As it states in the article, Harvard and Yale both turned positive returns.</p>
<p>You cannot track investments just by using indexes.</p>
<p>If you want to go to USC, why don't you apply and see if you get enough merit and/or financial aid?</p>