University Endowments See Strong Returns in 2007; Likely to Fuel Debate Over Tuitions

InsideHigherEd.com and The Chronicle of Higher Education (subscription required for full article) report that the Commonfund’s annual Benchmarks Study of Educational Endowments is reporting an average 16.9% return on investments in the 2007 fiscal year.  These results are an increase from 10.6% in the previous year and are the strongest results since 2000.  The study also found increases in average three-year returns, up to 12.8% from 12.3% last year.  At the same time spending from endowments fell slightly, from 4.5% to 4.4%.  Another study of endowments, by the National Association of College and University Business Officers is due out next week.  In recent years. the results of the two studies have been relatively close.

The strong returns are likely to add fuel to the ongoing debate about tuitions charged by universities and the amount of financial aid they provide.  Previous coverage of this debate is available with respect to Harvard, the University of California system, and Yale.

LHM