<p>^I criticized a post for being naive because it did not look at the long term interests of both the students and the university, their incentives allign.</p>
<p>I’ve taken several math and stat courses thank you very much, here’s why you might not have:</p>
<p>“For the past ten years, endowments have earned on average 15% per annum.”</p>
<p>it is more like 8-11% on average : - [List</a> of U.S. colleges and universities by endowment - Wikipedia, the free encyclopedia](<a href=“http://en.wikipedia.org/wiki/List_of_U.S._colleges_and_universities_by_endowment]List”>List of colleges and universities in the United States by endowment - Wikipedia)</p>
<p>9% vs 15% exponential growth is much more than just a rounding error.</p>
<p>on top of that schools benefit from having a larger endowment, larger endowments enrich a whole school, and a high level of growth is needed to remain competitive. </p>
<p>long term interests of keeping up with competition and improving services vs. current interests of higher spending. </p>
<p>To spend more than 5% would imply a growth rate that is too slow to keep up with peers, in a competitive world to not keep up but to still grow, is still - to lose. Perhaps it is a race to be thrifty, but it’s one in which not competing will eventually lead to a worse education for students at your university. And univs obviously know better than to disregard short term interests, they’re constantly pressured to spend more now afterall.</p>
<p>You seem to miss or disregard this delicate balance of long term vs short term interests.</p>
<p>also Fin Aid can always only be a small proportion of spending - what you’re not going to keep up facilities? you’re not going to expand so that you can educate more?</p>