How Do University Endowments Work?
While applying to college, students and parents may consider a variety of factors before enrolling. Those factors could include everything from the programs the school offers, to its location, sports programs, tuitions, and potential financial aid.
But, one more thing families may want to think about is a college or universityâs endowment. Not familiar with the term?
Hereâs helpful information about university endowments, how they work, how they are managed, which schools have the largest ones, and how those university endowments could potentially benefit students.
What Is an Endowment?
scholarship that provides financial support for a student or studentâs tuition and fees. A donor could even provide the university with $5 million for a named deanship, which will be used for unrestricted support for the department at the discretion of the Dean.
Who Manages a University Endowment?
Every school decides how to best manage its own endowment. Some colleges and universities hire internal staff to manage its endowment while others hire outside firms and professional investors to oversee the money.
There may be an endowment manager or a committee or team that works to manage the funds. They will generally work with the university to decide its goals for the endowment, such as making as much income as quickly as possible, or going for more long term sustainable growth. Then, decisions about how and where to invest the money are made to help the endowment meet its goals.
Which Universities Have the Largest Endowments?
According to US News and World Report, Harvard University in Massachusetts has the largest endowment at nearly $41 billion. Yale University in Connecticut comes in a distant second with just over $30 billion, and Stanford University comes in third with nearly $27.7 billion.
Princeton University in New Jersey comes in at number four with $25.6 billion and Massachusetts Institute of Technology in Massachusetts rounds out the top five with $17.4 billion.
University of Pennsylvania, Texas A&M University, University of MichiganâAnn Arbor, University of Notre Dame, and Columbia University, make up the remaining top 10 with endowments ranging from $10 to $14 billion.
However, these schools can be considered major outliers on the endowment scale. In 2019, the National Association of College and University Business Officers analyzed 774 university endowments and found the median fund balance was $144.4 million.
How Are University Endowments Used and Why do They Matter?
University endowments can be used for a variety of financial needs including hiring new professors, building new buildings or upgrading new ones, and can even be used for fellowships or scholarships.
specific scholarships funded by donors, or by applying for any and all available financial aid to help them pay for college.
However, sometimes, financial aid and scholarships can fail to stack up against the growing cost of tuition. And thatâs where a private student loan could come in to help fill the gaps.
Private student loans are usually available via a bank or another private lender or financial institution. Different lenders will offer different terms, so students will likely want to shop around for one that fits their specific needs.
Along that search consider checking out the private student loan options available with SoFi. Private student loans are not right for everyone and should be considered after all other options, including federal student loans, have been exhausted.
Potential borrowers can see if they pre-qualify and at what rates in just a few minutes online. If a student is adding a co-signer (which could potentially improve their chances of getting their loan approved) they can add that person directly into the application.
If approved, borrowers can choose from one of four flexible repayment plans. Think of it this way: A SoFi private student loan could help you invest in yourself by filling in the gaps to help you pay for your college education.
Need more financial aid than you qualify for? Checking out SoFiâs Private Student Loan options is a one place to start.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFiâs eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
The post How Do University Endowments Work? appeared first on SoFi.