As tuition costs continue to mount at colleges in America, some colleges are sitting on mountains of cash.
And while some of that cash goes to regular campus operations or scholarships for students with financial need, many colleges in America don’t really use it at all, investing the money to fund big future projects.
And sometimes, when the economy tanks, the money simply gets lost in the market.
Private schools rely on alumni and corporate sponsors to raise funds for the school’s endowment fund, and while some endowments face restrictions in how money gets spent (as in some donations can be spent only after a certain amount of time, or can be invested only so as to use the profits, not the capital), many leading colleges in America have taken criticism for collecting the money and sitting on it while raising costs for students.
The most recent comprehensive endowment study from the National Association of College and University Business Owners, which evaluated the endowment funds for 839 colleges in America as of last year, found 75 with more than $1 billion in the bank.
Thanks to TheStreet for the information provided in this article by Greg Emerson.