University endowments are comprised of money or other financial assets that are donated to academic

institutions. Charitable donations are the primary source of funds for endowments. Endowment funds
support the teaching, research, and public service missions of colleges and universities. These funds are an
important source of revenue for many higher education institutions

Then there was a shift where the most prestigious colleges, the Harvard's, Yale's, Princeton's and some
others started investing more in things like venture capital stocks and equity markets. From there,
administrations became a lot more intertwined with the finance world, their endowments became a lot
bigger and the universities became a whole lot more powerful.

Ok, so some of the endowment does go back to the universities, but exactly how it's divided up is left up to
the administrations and sometimes it's controversial.

Which U.S. college endowment fund is bigger than the GDP of nations like Jordan, Latvia, Tanzania and
others?

Well, of course it's it's Harvard. The Ivy League school has a big endowment. Not just big, it's huge. Thirty
nine billion dollars.

For context, Facebook has forty one point one billion dollars in what's essentially cash.

Amazon has $41.2 billion and Coca-Cola has $16 billion. And it's not only schools like Harvard, even some
public schools have huge endowments.

All massive university endowments are pretty distinctly American Altogether, U.S. colleges have more than
$616 billion in endowment assets, but they only spend about five percent of that every year.

In 2018, most of the money was put into things like hedge funds, real estate, stocks and bonds. That tiny
sliver right there, roughly 5 percent, that's $1.8 billion. And that's what went to the university's operating
budget. That means things like professors salaries and financial aid.

They have used the funds that they have to support more financial aid for low income students to make
college more affordable for those low income students that they do enroll. But again, they enroll so few low
income students that those increases in financial aid are not that meaningful.

And still with all that money why there is rising in tuition ?

Harvard's website does say that it doesn't use endowments to reduce tuition because, one, they have to
maintain the endowment. Schools have billions of dollars and they don't just want that money sitting in a
checking account. Lots of it is earmarked for specific projects like a scholarship fund or research in a
particular lab on campus.

The rest of the money is invested to grow the endowment even larger…

Researchers have looked closely at the incentives behind this behavior and found that there has been a
trend toward an overemphasis on the health of an endowment rather than the institution as a whole

The rise of for-profit universities and colleges

From 2000-10, the sector grew by some 235% in enrolment, increasing its market share from 3% to 9.1% of
all tertiary enrolled students.

At the same time, and not surprisingly, the number of new for-profit institutions grew. In the five-year
period beginning in 2005, a total of 483 new colleges and universities gained regional or national
accreditation in the US. Of those new institutions, some 77% were for-profits, compared to only 4% public
and 19% independent non-profit institutions.

In total, and while still representing less than 10% of all enrolments, the for-profit sector currently accounts
for 26.2% of all the post-secondary institutions.

John Aubrey Douglass is a senior research fellow at the Center for Studies in Higher Education, University of
California, Berkeley. https://www.universityworldnews.com/post.php?story=20120710160228719

CNBC https://youtu.be/GQuf7UAbf4s

Investopedia https://www.investopedia.com/terms/e/endowment.asp#:~:text=An%20endowment%20is
%20a%20donation,income%20for%20a%20specific%20purpose.