College endowments wilt with economy

Market meltdown forces schools to impose sharp budget cuts

When the markets were booming, billionaire colleges like Harvard, MIT and Stanford tapped their swelling endowments and launched spending binges on faculty, buildings and scholarships.

Now, they're seeing firsthand the one downside to relying on a huge nest-egg: The market crash has them confronting the sharpest budget cuts in memory.

A new survey released Tuesday reports college endowments fell 3 percent in the fiscal year ending June 30. In a follow-up, a smaller group estimated declines averaging 23 percent in the first five months of fiscal 2009, which began in July.

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