Despite the pandemic, the universities with the biggest endowments still raised tuition

colleges raising tuition harvard
Photo via Niklas Tenhaef/Flickr (CC BY SA 2.0)

When colleges and universities announced over the summer that many would not resume in-person learning for the fall semester, students said they were entitled to a discount on their tuition. While some schools listened, universities with the biggest endowments not only won’t provide their students with discounts—a number of those colleges raised tuition rates. 

MarketWatch compiled a list of the 100 universities with the biggest endowments and shared whether the schools planned to reduce, raise, or freeze their tuition rate. Most notably, Harvard University—the school with the largest endowment—raised its tuition by 4% despite going forward with entirely online learning for 2020-21.  

In July, Harvard announced classes would be exclusively online, although some students would have the option to live on campus. 

Rachael Dane, a Harvard spokesperson, told MarketWatch the university went virtual to “protect the academic enterprise.” She also shared that Harvard intends to adjust financial aid to provide a $5,000 room and board allowance for students living off-campus.  

The response from Harvard students can be seen in the data: the school’s newspaper, the Crimson, reported that 20% of Harvard students don’t plan to enroll for the fall. Additionally, 340 freshman—or 20% of the class—deferred their enrollment until 2021. 

Other schools in the top 10 of endowments increasing their tuition include the University of Texas System (2.6%), Yale University (3.9%), Stanford University (4.9%), the Texas A&M University System (2.6%), and the University of Michigan (1.9%). State universities in Florida might also raise their tuition prices for the first time since 2013.

Universities told MarketWatch that although campus life will look drastically different than before, most of the fixed costs it takes to run a university—like faculty salaries and healthcare—didn’t change. Plus, the universities expect to see a dip in other normal revenue sources, like philanthropy and sports. 

With fewer students expected to enroll because of the pandemic, that will lead to even less revenue. Some schools say they also plan to increase financial aid to support more students through the pandemic. 

Still, universities like Harvard and UT have enormous endowments. Harvard’s endowment is almost $40 billion. However, MarketWatch reports that it’s challenging to increase access to those funds because they are restricted to ensure “the university runs in perpetuity.” 

“Colleges don’t like spending large amounts of money out of an endowment in any given year,” Robert Kelchen, an associate professor of higher education at Seton Hall University, told MarketWatch. “On the other hand, the endowment is also there for a rainy day, and it’s pouring right now.”

Some colleges are raising tuition and increasing their payout from endowment funds. In addition to its almost 5% increase in tuition rates, Stanford University shared in June that trustees approved a 3% increase in payout from the endowment to support student financial aid. 

But not every wealthy university planned to increase tuition in 2020. MIT, the University of Pennsylvania, and the University of California all planned to freeze tuition rates. The University of South Carolina will do the same.

Princeton University is the only school in the top 10 for endowments to give students a discount (of 10%). Ranking at No. 21, Johns Hopkins University also plans to give students a 10% discount and to set aside an additional $15 million for undergraduate financial aid. 

According to CNBC, college undergraduate enrollment has declined by 2.5% since the pandemic began, while community college enrollment fell to 7.5%.

By October, though, some colleges began offering discounts on tuition prices to help students navigate their way through the pandemic.

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Sources: Inside Higher Ed, MarketWatch, the Crimson

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