USC loses significant portion of its endowment

$1.2 billion to be exact.

The world market did not bode well for private universities these past two years. USC’s endowment was about $3.7 billion at its high in 2007, and is somewhere around $2.5 billion now, although figures for the last financial quarter haven’t been released yet. USC, unlike private schools such as Harvard with much greater endowment pools, doesn’t rely too heavily on its endowment for everyday spending, so it wasn’t affected the same way.

You can read the whole story here.

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2 responses to “USC loses significant portion of its endowment

  1. sperlmutter

    How do you think that USC will be affected by the loss in their endowment? Are the going to have to put some of the major projects on hold? I know there is a part of the endowment dedicated for financial aid. I hope that the losses do not effect certain students ability to pay for their education.

    • Taylor Friedman

      USC will not be affected by the loss this year because they calculate how much money they use from the endowment based on a three-year rolling average. Next year, the losses will weigh more heavily in the average, and thus adversely affect the payout rate from the endowment. If the university wanted to match its payout next year with this year’s, they’d have to increase the percentage that they take out from the endowment for the operating budget. Still, the endowment only makes up about4 percent of the school’s overall operating budget, so as long as USC’s other income sources are dependable, it shouldn’t have too much negative impact.

      As far as new projects, the school is continuing construction on the new Campus Center, but construction projects that were in the proposal stage have been stalled for now. To be honest, I’m not totally sure how financial aid is affected. There has been some controversy over that because the school said it provided significant more aid this year than in previous years, but a lot of upperclassmen lost portions of their university grants. Apparently the university has a new system for calculating the financial aid allocations.

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