I’m assuming there’s a correlation between endowment sizes and aid given? Anyone notice relationship? This is purely for curiosity. Is there an easy way to see all the endowments? Is endowment size tied directly to financial health? At least for private institutions. I’m assuming public are more reliant on state funding. Maybe I’m wrong.
Just curiosity!
For me- I noticed smith has a large endowment and gives a lot of aid. At least from my limited googling and reading.
For a comprehensive analysis of financial health, the Forbes rating discussed in this topic may be of interest: Forbes 2024 Financial Grades.
I’d say yes and no on the privates.
There’s endowment but also by student so $1 billion with 20k students is different than $1 billion with 2k students.
Some schools, like Tufts and Wake are very generous, but are need aware - so they’re only generous to who they want to be - and others they’ll reject for needing too much whereas a need blind school (Harvard, Vanderbilt) does not take finances into account. (Edited by moderator to comply with forum rules)
Some give merit because they need to in order to secure students - Miami and Case Western come to mind. It’s not for being nice - it’s to ensure they have revenue flowing in.
A few publics have large endowments but they are funded by both tuition and the government. Some like OOS kids because they pay full while others are desperate to buy in out of state students so they offer crazy merit for top students, perhaps In hopes of boosting standing, but top students flood to these schools as they save their parents $$$.
Others who do this get in trouble - see U of Arizona as an example, and then cut back.
I believe Smith is need aware but they are he midst of raising funds so they can become need blind. Perhaps that’s happened already but I don’t see that yet.
Smith has some merit. Need wise, it’s hard to see current stats as the CDS is a few years old but 57% received an average of $58,200.
Looks like 8% or so without need were given merit at just over $19k. So a list 1/3 is full pay I’m assuming.
As for financial health, you might use a school’s S&P or Moody’s bond rating to determine its health. That may or may not translate to a student experience but you’ll know who is on solid financial footing.
Hope that helps.
There are school endowments…and there are endowed scholarships…which are two different things.
Endowed scholarships are merit awards, and some do consider need as well.
Colleges that don’t give merit aid also don’t have endowed scholarships.
Reminder that discussions of race in admission is not permitted outside of one thread in the PF. Post edited and follow up post hidden.
Thank you for your understanding.
Running the college’s NPC makes the most sense.
Endowed scholarships can be for FA as well - and often are only that at schools that don’t give merit scholarships. The donor may specify who can receive these funds (i.e., students from Montana) or just give the funds for FA. It’s a bit of an art form for the FA office to get everyone the $ they need and make sure all the funding comes from the right places. All funds, restricted and not, are part of the endowment.
Overall, schools with larger endowments tend to be more generous because they have more to be generous with. But if the funds in the endowment are earmarked for something that isn’t scholarship related – i.e., a faculty position, maintenance of a building or a collection owned by the school, they don’t impact scholarships much. Arguably, the dollars are fungible.
The decision to offer merit is often not about endowment - but how to attract specific students. For example, an uber-selective school may be able to create the student body it wants based on reputation alone and need not entice full pay students with merit scholarships. Other schools may try to lure those FP students from those schools with merit scholarships, essentially making them much less expensive. Most of these have smaller endowments than the uber-selective schools.
If you are curious for your own purposes - especially if the NPC shows you will be FP and you need/want merit - you’re better off looking at schools that offer merit than focusing on endowment size.
Denison University has an endowment of $1.1 billion. We found them to be generous with merit aid and they paid for my D’s airfare and hotel to visit for an admitted students event.
Yes, Denison is awesome that way!
Yet Princeton has loads more money and doesn’t offer merit. That’s exactly what I was describing above.
It’s not the endowment in general but the endowment per student which tells you how well off a college is, and therefore how likely they are to be generous with financial aid.
For example, the University of Rochester’s endowment is 3.5 billion, which sounds like a lot. But it’s endowment per student is $192,000 which is quite low.
Conversely, Washington and Lee’s endowment is approximately 2 billion, which works out to an endowment per student of $1 million.
And Washington and Lee is MUCH more generous with aid. 10% of the class gets full ride scholarships (everything paid, plus a $10,000 stipend), and they are one of a handful of need blind with regards to admissions decisions schools that also meet full need without loans. (Including for international students, which is extremely rare).
Rochester, on the other hand, is need aware in making admissions decisions and includes loans in its financial aid package. It also offers merit, but I’m unaware of any full ride merit program.
So if you like, most colleges have audited financial statements available online, and sometimes endowment reports as well. You can dig into these and find out how the money flows.
And yes, at a high level, there is likely to be some relationship between per capita endowment size and institutional financial aid, but it is complicated.
Basically, this happens because these institutions have operating budgets they need to balance, and what is sometimes called net tuition or similar (which is tuition and fees net of institutional grants) is usually an important component of operating revenues.
But there are other sources of operating revenues–research grants, sometimes net medical system revenues (so this is medical system revenues net of medical system costs), sometimes net revenues from other operations (publishing, space rental, and on and on).
And then there are gifts. Some gifts are for present use, and some are to an endowment fund that then generates usable returns. And some are restricted in use. But even those contribute to the operating budget because if they are paying for something, then you can redirect unrestricted funding to something else.
OK, so the more funding you get from other stuff relative to your operating expenses, the less you need from net tuition, which means the more generous you can be with institutional grants as those reduce your net tuition. And although a lot of other stuff might be contributing operating revenues, endowment returns can be a part of that.
But of course this is also a matter of choice. Like, you could reduce your operating expenses, and then be even more generous with your aid because you would need less net tuition. But that will have other consequences. Like, typically a very large component of operating expenses are faculty compensation. And you may not want to spend less on faculty compensation.
So basically, an operating budget ends up being a choice about how to best balance various competing institutional priorities. And while relatively large endowment returns are a resource that will give you more choices, your choice is likely not going to be to simply maximize aid and minimize net tuition.
All this is interesting but as other posters like to emphasize, it isn’t very actionable from a prospective student’s perspective. Like, presumably you really want to know what this institution will cost YOU. And for that you need to use their NPCs, maybe look at some information about merit policies, and sometimes just apply and see what they actually offer you.
And conversely, you don’t necessarily need to know why they have the need and merit policies that they have, as long as you know they will work for you. But if you are interested, you can look it up.
Yes, which is why many/most schools will explain to donors who want to establish endowed scholarships for students with certain profiles that those profiles (geographic location, major, etc.) can be be included as preferences–not requirements. This is especially true at need-blind/meet-full-need schools where flexibility is critical to ensure they can meet FA obligations.
Sometimes a donor will want to do something very specific–e.g., $30M to establish scholarships for children of autoworkers from the upper Midwest–that the school knows they will not be able to disburse because they just don’t get enough applicants (with sufficient need) from that population. So the gift agreement will state it as a preference, often with some sort of donor-approved cascade, e.g., children of autoworkers from the upper Midwest, then children of autoworkers from other states, then children of factory workers, then first-gen students from the upper Midwest.
Unrestricted giving is rare these days, so ensuring gifts actually meet the needs of the university is an art and a science…
Agree. Here’s a rankings list of the endowment per student:
The USNews once upon a time gave all sorts of brownie points to colleges with high endowment to student ratios. And then they stopped. One of the reasons, IIRC, is that as a metric it doesn’t really predict anything of importance other than the fact that it correlates with a school being need-blind. It doesn’t predict anything about how big an individual applicant’s grant award will be.
Yes, and at D3 schools which allow no athletic scholarships, you can’t designate it as “for a female swimmer” for example.
Overall, schools don’t want restrictions at all. Really big gifts, however, often speak to the donors in a way that requires them to specify. (More likely to be a building/center). Development folks are really good at understanding the school’s priorities as well as donors’ passions and making that match. And yes, in reducing restrictions as much as possible!
The endowment per student rankings is no way to be used as a predictor of how big a grant award will be. The NPC is more suitable for that. The endowment per student does serve as an indicator of the financial health of an institution, and financially healthy institutions tend to offer better financial aid. Looking at the institutions on top of the rankings list, this seems to bear out.
Maybe best to look in the CDS and see what % of kids are getting aid. It’s in Section H.
Some schools are pretty low and others have been shown to omit high need quality applicants - note on the high need.
My hunch is that a whole lot of families hunting for merit aid held that assumption at some point during their search.
@L_Abbott The new working paper on college closures from the Philly Fed said that endowment size does not protect from closures. I can give you a link if you want; the paper is technical.
Birmingham Southern, which sadly closed last year, had a decent endowment.
Schools with enormous endowments are different, but there are not many of them.
However, U.S. News never considered endowment for its rankings directly, or in a direct ratio, as that suggested above.
With respect to indirect mesures, such as might appear in, for example, faculty salaries, these still exist, although the weight placed on them has been adjusted across time.