University of Chicago bad at the economy
By Isn’t it ironic?
The University finds itself grappling with ballooning costs and a dramatically increased budget deficit. These changes are causing severe financial pressures as UChicago has attempted to catapult itself into contention with universities that have far larger endowments over the past two decades. . . .
While UChicago’s investments have allowed it to punch above its weight for decades, rising interest rates and a drop in operating income have necessitated a range of cost-cutting measures, including a temporary staff hiring freeze and voluntary staff retirement packages, as well as budget cuts for programs across the University. . .
However, UChicago’s 2022 endowment market value of $10.3 billion stood lower than many of its peer institutions. A majority of these institutions were founded before UChicago, affording them more time to invest and grow their endowments.
The last sentence was obviously supplied to the university’s student newspaper by administrative PR flacks.
Meanwhile, the Google says:
Thus, early in the twentieth century, endowments in higher education grew impressively. In 1920, eight private universities had the largest endowments in the nation: Harvard ($44,569,000), Columbia ($39,602,000), Stanford ($33,260,000), Chicago ($28,364,000), Yale ($24,049,000), Cornell ($16,001,000), Princeton ($10,313,000), and Johns Hopkins ($9,135,000).
So a century ago Chicago’s endowment was 64% the size of Harvard’s, while as of last summer it was 19.9% as large. Meanwhile, Yale’s has gone from 54% as large to 81%. Boola boola!
Anyway, Chicago is losing nearly $300 million per year right now, while its debt grew from $2.2 billion in 2006 to $5.8 billion in 2022. What could explain this dynamic? The university’s many Nobel-prize winning economists stand ready with a brilliant insight or three:
“The deficit exists because the growth in expenses has been greater than the increase in revenue,” wrote a University spokesperson in response to a question from The Maroon.
Rigor! (Denverite, you are on the clock)