The average total cost of tuition, fees, room, and board rose 10% over the past five years at public colleges and by 12% at private institutions, according to The College Board. But median family income rose only 7%.
Anyone with eyes can see that’s a problem. President Trump has condemned the fact that tuition is rising higher than inflation, and mentioned punishing colleges with large endowments that don’t use a bigger percentage of those funds to lower tuition and cut costs.
But some schools have larger endowments than others. According to the National Center for Education Statistics, 15 universities had over $7 billion in the bank (as of the end of the 2014 fiscal year). These funds, which typically represent money donated to the university, are often under a strict allocation policy, meaning the donor can specify and prohibit what the money is used for. Common uses could be to attract world-class professors, grow the football team, revamp the library, or perhaps most appropriate, create additional opportunities for scholarships and merit-based aid. Typically, only about 5% of the endowment is spent, while the rest is saved. So it begs the question: Where does the money go? And why college still so expensive if universities are so flush with cash?
Unfortunately, not enough colleges — particularly wealthy colleges — are allocating the portion of funds they do spend toward scholarships and grants. And Congress would like that to change. “Institutions are not passive in raising funds. If they really wanted to, they could ask for donations for financial aid specifically” Andrew Nichols of The Education Trust tells CNN.
Now, to be fair, some already do. At private colleges, the average family paid $26,080 for tuition, fees, room, and board compared to the average sticker price of $45,370. Still, that’s about 46% of median family income. Other colleges could do better. Despite being labeled as the richest colleges in the U.S., tuition at these 15 institutions remains steep. Are budget cuts in order? Maybe a required course called Money Management 101? For some universities, we think so.
15. Emory University
- Endowment: $6.98 billion
- Annual cost of attendance: $66,950
Emory is a private Methodist university located in Atlanta, Georgia with nearly $7 billion in the bank. It’s also a smaller school with less overhead and fewer students. Still, only about half of Emory students receive some sort of financial aid, which cuts the average cost to $25,928.
Next: The Blue Devils
14. Duke University
- Endowment: $7 billion
- Annual cost of attendance: $72,710
Niche reports that 61% of students receive financial aid from Duke University, meaning most students will only pay $21,295 per year in tuition and fees. But with over $7 billion in endowment funds, Duke is likely another university who could be doing more to make college affordable.
Next: Money on the West Coast
13. University of California System
- Endowment: $7.4 billion
- Annual cost of attendance (in-state): $33,604 at UCLA for example
Ten campuses, five medical centers, and three national laboratories make up the entire University of California school system. Allocating $7.4 billion in endowments across such an expansive system may be tougher than usual. But deep pockets provide more tuition aid. Over half of UCLA students receive aid, according to its website, and two-thirds of Berkeley students get help.
Next: A premier college
12. Northwestern University
- Endowment: $7.5 billion
- Annual cost of attendance: $72,980
Northwestern University is located in Evanston, Illinois, and consistently ranks as one of the nation’s premier colleges. It could be they’re using their endowments to attract the best professors and remain on the cutting edge of education, but considering the price of tuition, the average American family may find it hard to swing such a bill, despite its legacy. Currently, about 62% of students receive financial aid in some way, shape, or form.
Next: A historic school with a hefty price tag
11. University of Notre Dame
- Endowment: $8.18 billion
- Annual cost of attendance: $69,395
A $20 million gift recently endowed Notre Dame’s newest Institute for Global Investing. Still with over $8 billion in the endowment fund, many wonder if the Fighting Irish could afford to allocate a bit more of their reserve for spending.
Next: College in the Big Apple
10. Columbia University
- Endowment: $9.22 billion
- Annual cost of attendance: $70,881
Columbia University cracks the top ten richest colleges for endowments. In fact, they employ a $50,000 gift minimum. Funding a college experience in the Big Apple can be tough with such a high cost of living. 58% of students receive financial aid, but over $9.2 billion in the bank suggests that those assets could be allocated elsewhere to help ease the tuition burden for students.
Next: A top business school
9. University of Pennsylvania
- Endowment: $9.58 billion
- Annual cost of attendance: $72,584
The University of Pennsylvania is home to one of the nation’s top business schools. It’s also one of the most expensive universities to earn an undergraduate degree. NCES reports that UPenn sits on an endowment fund of over $9.5 billion, some of which is allocated toward tuition aid. So it makes sense that the university has seen 171% growth in their financial-aid budget since 2004.
Next: The Wolverines
8. University of Michigan, Ann Arbor
- Endowment: $9.6 billion
- Annual cost of attendance (in-state): $27,072
The University of Michigan is regarded as one of the nation’s most affordable elite colleges. According to their endowment fund, it’s also one of the richest. Nearly two-thirds of students receive financial aid and tuition assistance, so it seems other universities could learn a thing or two about money management from those in Ann Arbor.
Next: Aggie central
7. Texas A&M University, College Station
- Endowment: $10.52 billion
- Annual cost of attendance (in-state): $27,452
The Aggie endowment fund easily surpasses the $10 billion mark. But tuition here is relatively reasonable here compared to the other flush colleges on this list. The university recently allocated $1.2 million to A&M researchers to study the effects of Hurricane Harvey. In addition, they award over half-a-billion dollars in financial aid each year.
Next: An acronym synonymous with prestige.
6. Massachusetts Institute of Technology
- Endowment: $12.43 billion
- Annual cost of attendance: $65,478
MIT is consistently ranked as one of the world’s top universities for student-faculty ratio, academic reputation, and employer opportunities. So, it’s safe to assume that its massive $12 billion endowment fund is put to good use. About 33% of their students attend tuition-free, while scholarship awards hover around $38,871.
Next: The first of the Big Three schools
5. Princeton University
- Endowment: $20.58 billion
- Annual cost of attendance: $70,010
Princeton University is the first of the Big Three universities to appear on this list of the richest colleges in the U.S. But the numbers suggest that this university spends their money wisely. Nearly 50% of the endowment is allocated toward Princeton’s operating budget revenues. The fund also provides almost 80% of the University’s scholarship budget.
Next: The Cardinals
4. Stanford University
- Endowment: $21.47 billion
- Annual cost of attendance: $69,109
It costs almost $70,000 to attend Stanford University. Still, the university enjoys an endowment almost as big as the state it resides in. Almost 75% of the endowment is designated by donors for a specific purpose, according to the Stanford finance website.
Next: The Bulldogs
3. Yale University
- Endowment: $23.86 billion
- Annual cost of attendance: $70,570
Yale University rounds out the top three richest colleges in America reporting almost $24 billion dollars in its endowment fund. With such deep pockets, it’s expected the Bulldogs put this money to good use. Yale provided $367 million in financial aid in 2016 with 49% coming from the endowment. In addition, no parent making under $65,000 annually is expected to pay tuition at all.
Next: An endowment the size of Texas
2. University of Texas system
- Endowment: $25.45 billion
- Annual cost of attendance (in-state): $20,876 at University of Texas, Austin
The UT system recently approved tuition increases between 2 and 4% across the board. Still, it is ranked as one of the most affordable public universities in the country. But $25 billion in endowments, the second richest in the nation, tend to help such matters.
Next: The richest college in the nation
1. Harvard University
- Endowment: $36.43 billion
- Annual cost of attendance: $72,100
It’s no surprise that the hallowed halls of Harvard University require serious funding to main such prestige. The university’s endowment towers over all other universities topping out at over $36 billion last year. Tuition climbs higher than most institutions on this list, but as mentioned on their website, families earning less than $65,000 receive free tuition. And those making between $65,000 and $150,000 won’t pay more than 10% of their income.
Follow Lauren on Twitter @la_hamer.
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