In a previous blog we discussed the increasing size of college endowments and the increasing cost of education for students. In a recent evaluation of endowments for the past year, the value of university endowments has fallen about 23% on average. It is the largest drop in the value of endowments since the mid 70’s. In fact, with the economic crisis it should come as no surprise that endowments too have felt the impact.
Senate Finance Committee chairman Chuck Grassley, R-Iowa has once again commented on the issue stating that colleges should not use the volatility of the current economic climate to raise tuition or decrease financial aid.
Unfortunately, students are already feeling the impacts of the economic downturn. In a recent article in The New York Times a study revealed that students are spending more on college education but the schools are spending less on their students. Administration costs have increased and tuition have increased but the schools are cutting their budgets for instruction. The study was conducted by Delta Project Reports a nonprofit organization that is working to increase college affordability.
With high costs of education and both universities and students trying to find money to make ends meet, it will be interesting to see the complete effects of the current economic crisis.