As tuition costs continue to mount at universities across the nation, 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 schools 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 are quite restricted (as in they can only be spent after a certain amount of time, or can only be invested so as to use the profits), many leading universities 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 2011 endowment funds for 839 institutions in the U.S., found 75 with more than $1 billion in the bank.
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Here are the 10 richest universities in the U.S. If any of the results surprise you, let us know in the comments section below!
The Richest College: Harvard University
2011 endowment funds: $31,728,080,000
Change from previous year: 15.1%
Students, Fall 2011: 21,000
Undergraduate tuition: $52,652 for tuition, room and board for the 2011-2012 school year
Topping the list for the richest university in the U.S. is Harvard, a school used to appearing at the top of most college rankings of distinction. The school’s more than $30 billion eclipses the other schools’ endowments on this list, so even though the fund saw the least year-on-year growth of any other on the list, it doesn’t seem to be in much danger of slipping down in the ranking. In any case, the recent success of a certain Asian-American Harvard alumnus in the NBA will surely open many alumni wallets for next year.
2nd-Richest: Yale University
2011 endowment funds: $19,374,000,000
Change from previous year: 16.3%
Students, Fall 2011: 11,875
Undergraduate tuition: $52,700 for tuition, room and board for the 2011-2012 academic year
Yale University’s close to $20 billion endowment gives it the runner-up spot on the list, though the 16% increase in that fund from the previous year is one of the lowest of the top 10 schools, suggesting that it may not hold the second spot for long. The school also reports a declining participation rate among its alumni donors, which has gone from 41% in 2001 to 34% in the current academic year.
3rd-Richest: University of Texas
2011 endowment funds: $17,148,649,000
Change from previous year: 22%
Students, Fall 2011: 51,112 for the main Austin campus
Undergraduate tuition: $9,816 for residents, $32,594 for non-residents, covering tuition only for the 2011-2012 school year
The University of Texas system, with an endowment of more than $17 billion, is the richest public university in the U.S., and the third richest overall. That’s important, as the school says it only receives 20% of its budget from the state, and that support has dropped steadily since 2009, leading to student walkouts to protest the budget cuts.
4th-Richest: Princeton University
2011 Endowment Funds: $17,109,508,000
Change from previous year: 18.9%
Students, Fall 2011: 7,859
Undergraduate Tuition: $54,780 for the estimated cost of attendance in the coming 2012-2013 academic year, including tuition, room and board.
Princeton University, with the second-highest tuition rate for undergraduates on this list, also has the smallest student body. That means its endowment can be spent more on capital projects than many of the schools on this list, though the institution decided last year that it would keep spending at 4%-5.75% per year to allow the fund to generate income through investments.
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5th-Richest: Stanford University
2011 endowment funds: $16,502,606,000
Change from previous year: 19.1%
Students, Fall 2011: 19,945
Undergraduate tuition: $52,860 for tuition, room and board for the 2011-2012 academic year
For a school whose most famous graduates were dropouts (see Google founders Larry Page and Sergey Brin, plus the founders of Yahoo! and Sun Microsystems for starters), Stanford University has a generous alumni community that in 2011 contributed more than 36% of the year’s $709 million raised for the fifth-largest endowment of any university in the U.S. The money funds 20% of the school’s operating budget, allowing Stanford to maintain a top-notch level of instruction that is perhaps so good it allows star pupils to drop out and get rich before getting their degrees.
6th-Richest: Massachusetts Institute of Technology
2011 endowment funds: $9,712,628,000
Change from previous year: 16.8%
Students, Fall 2011: 10,894
Undergraduate tuition: $40,460 for tuition only for the 2011-2012 academic year
Not surprisingly, MIT’s leadership in the field of technology and scientific innovation account for the considerable size of its endowment, as many students and faculty projects find lucrative commercial applications. Money flows back into the school’s nearly $10 billion endowment, a portion of which goes to the university’s annual expenditures – approximately 75% of which go to instruction and specific research projects. It’s a (not) vicious cycle that keeps the school well in the top 10 of the country’s richest universities.
7th-Richest: University of Michigan
2011 endowment funds: $7,834,752,000
Change from previous year: 19.4%
Students, Fall 2011: 42,716 for the main Ann Arbor campus
Undergraduate tuition: $25,204 for tuition, room and board for on-campus residents for the 2011-2012 school year.
The University of Michigan, with the largest football stadium in the country (capacity: 109,901), has one of the most dedicated alumni communities in the U.S., and that no doubt has helped its endowment fund make the top 10. Ann Arbor is considered one of the most affordable and enjoyable college towns in the country, and the constant influx of people for school-related activities has led the university to use some of its funds for nearby parking facilities costing millions of dollars in recent years.
8th-Richest: Columbia University
2011 endowment funds: $7,789,578,000
Change from previous year: 19.5%
Students, Fall 2011: 28,221
Undergraduate tuition: $59,208 for tuition, room and board for the 2011-2012 academic year for New York residents.
New York is an expensive place for any purpose, and Columbia University can claim the most expensive year of undergraduate cost of attendance on our list. That has much to do with the high price and scarcity of real estate in the big apple, and the school’s efforts to expand and develop its campus have been fraught with obstacles and local opposition. The school’s massive 17-acre, $6.3-billion expansion plan finally had to get permission from the state supreme court to proceed, in a ruling that allowed the university to force property holders to sell it the required land in late 2010.
9th-Richest: Northwestern University
2011 endowment funds: $7,182,745,000
Change from previous year: 20.8%
Students, Fall 2011: 20,284
Undergraduate tuition: $40,223 for tuition, room and board
With most of its operations concentrated in Evanston, Ill., Northwestern University’s undergraduate and graduate degrees are top notch, with the law and medical schools cranking out well-paid professionals who give back to the school generously. Regular distributions from the university’s ninth-largest endowment account for 17% of the annual budget, most of which goes to new building construction (44% of endowment funds in 2009) and renovation projects (42% of 2009 funds) on existing sports and academic facilities.
10th-Richest: Texas A&M
2011 endowment funds: $6,999,517,000
Change from previous year: 22%
Students, Fall 2011: 49,861
Undergraduate tuition: $19,035 (estimated cost of attendance for Texas residents for one year at the main campus)
With its flagship campus in College Station, Texas, centrally located in the triangle formed by Dallas, Houston and Austin, the Texas A&M University system (comprising 12 total campuses) has a number of ties to business and industry in the area, including NASA’s Johnson Space Center outside of Houston. That means many of the school’s business and engineering graduates have plenty of opportunities to stay in the area after leaving the university, and the strong alumni community has helped the school’s endowment reach the top 10 in the nation.
One of the most recent projects those funds have been allocated for is a planned expansion of the school’s veterinary hospital, along with classrooms and a teaching lab at a projected cost of $120 million.