Yale To Increase Financial Aid To Students
Posted on January 7, 2008
Filed Under Student Loans |
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Citing a huge windfall from the University’s investments, Yale announced today that it would be spending more of its money for financial aid to students, bypassing Uncle Sam.
Yale said it expects to pay out 1.15 Billion of the 22.5 Billion endowment. Yale said it expects to pay over 840 million in the current cycle. What an investment!
Yale declined to put a number on the financial aid to undergraduates though, although they did say the financial aid would be substantial.
Harvard and Yale are America’s two richest universities and their investment returns have long beaten the Standard & Poor’s 500 index returns.
Yale President Richard Levin said recent investment results prompted the university to overhaul the way it spends its own money.
Levine had this to say about the increase in financial aid;
“The prudent policy revision we are making will increase spending from the endowment to benefit students and researchers today while continuing to ensure that the endowment’s capacity to support future generations of students is undiminished”
In recent years, Yale has tried to spend roughly 5.25 percent of its endowment every year. However this number changes due to the returns of Yale’s investment returns.
The new formula calls for the school to spend at least 4.5 percent and no more than 6 percent.
Foundations are required to spend 5 percent of their endowments, but some colleges do not even come close to spending that much.
Yale is also looking at expanding the size of its undergraduate body to 6,000 from it’s current body of 5300.
Yale’s endowment relies exclusively on outsiders including hedge fund managers to invest the university’s money.
According to the statistics put together by the College Board, tuition at public and private colleges rose by more than double the rate of inflation.
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