November 15, 2021
Markets

US universities turn on spending taps as value of endowments swells

Some of the most prestigious universities in the US are heeding calls to spend more on students and staff after their endowments notched the strongest returns in decades thanks to booming asset prices.

Universities have been a major beneficiary of buoyant financial markets because they plough a big proportion of the gifts they receive from alumni and other benefactors into equities and private investments.

But the increasing value of their endowments in recent years has prompted demands for universities to share the proceeds with students and employees through lower tuition costs and higher pay.

“Moving to lower costs and increased access, including lowering [the price of tuition], would be a bold move and can be afforded in this environment,” said Richard Vetter, a professor emeritus of economics at Ohio University.

The Massachusetts Institute of Technology this week…

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