Political pressure increases on endowment spending
- Inside Higher Ed reports on the growing amount of attention for public and private university endowments, which are slated to yield their worst returns since the recession of 2008 with a median loss of .73% over the last fiscal year.
- Many institutions have recalibrated investment strategy, hired new fund directors or elected to reduce spending, as market flux has forced Harvard University's endowment management company to change presidents four times in the last 10 years alone.
- Some observers say the financial losses, reported from June 30, could be a sign of short-term stress caused by the summer Brexit secession and resulting market volatility.
Like individual or family investments, the yield of endowment returns depends heavily on the strategy used in investing and not necessarily the stability of the market itself. Schools like Yale University and the University of Oregon posted positive returns over the last year, showing that there are some markets and companies primed for growth of which other institutions have not yet taken advantage.
As for the political attention, there is little colleges can do to convince lawmakers and politicians that billions sitting untouched in an account is a benefit to taxpayers and students. Potentially, the same rulemaking from the U.S. Department of Education that eliminated schools in the aggressive for-profit sector of higher ed may extend to monitoring of endowment spending on lower-income students.
- Inside Higher Ed Low returns, high pressure