Higher education has been a growth industry in the United States, evidenced by swelling enrollments, expanding campuses and growing endowments. But the global economic crisis has caught colleges and universities in a vice.
With their endowments shrinking along with stock markets, some schools may raise tuition more than usual, even as students complain it is already too expensive and struggle to get loans.
At the University of Wisconsin in Madison, the school’s $1.8 billion endowment has shrunk by 18 percent since the start of the year, Sandy Wilcox of the University of Wisconsin Foundation said. Dipping into the endowment to make a promised contribution to the school’s budget only shrinks it further.
Wisconsin, like many schools with substantial endowments — 400 have endowments over $100 million and 76 above $1 billion — use a three-year averaging system to smooth out how much they pay out from earnings.