How Struggling Colleges Can Use Their Endowments
Many US colleges are struggling financially, with over 20 colleges closing or announcing mergers last year, despite having large endowments that have seen an 11.5% average return rate in 2025. However, these endowments often come with restrictions that limit their use for operational costs.
US colleges are facing financial challenges, with enrollment trending downward and over 20 colleges closing or merging last year. Despite having large endowments, many schools struggle to use these funds for operational costs due to donor-imposed restrictions. Large endowments had an 11.5% average return rate in 2025, but some funds are illiquid due to investments in private equity. As a result, boards are rethinking their endowment strategies and considering how to deploy their capital. Some schools view their endowment as a way to build credibility and demonstrate alumni support. Colleges must now determine how to balance their financial needs with the restrictions on their endowments.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.