“… At least 11 U.S. universities with assets of more than $1 billion reported declines for the year through June 30. Endowments of all sizes were down a median 0.74 percent, according to the Wilshire Trust Universe Comparison Service. The Wilshire data, from fund custodians, excludes fees while most schools report returns net of fees.” …
Implications for financial aid?
This is a non-story. Markets go up, markets go down. The period in question is the fiscal year for these schools that ended June 30, a 12 month period that was not particularly good for the market. Things have been much better for the past three months.
To answer your question, here is a quote straight from the article, regarding Dickinson College: “The negative returns will have no immediate impact on college operations.” In fact, Dickinson “calculates its spending rate based on the past three years of investment performance. The annualized three-year return was 5.6 percent through June 30, according to the school.”
One reason why the argument “Harvard should just spend its entire endowment on financial aid for everyone” or “Yale should get taxed on its endowment returns to punish them for being so successful” is so moronic. Markets go up, markets go down, a well managed endowment is a hedge on future uncertainty whether it’s asset class, global currency fluctuations, recessions/economic recovery, etc.