Higher Ed Dive utilized the expertise of UW–Madison’s Nicholas Hillman for an article that is headlined, “Endowment returns ballooned to 30.6%, their highest level since 1983.”
Hillman is a professor in the School of Education’s Department of Educational Leadership and Policy Analysis, and the director of the Student Success through Applied Research (SSTAR) lab.
The article spotlights surging endowment returns across U.S. higher education in 2021, averaging 30.6 percent after fees during the 2021 fiscal year. While this may be good news, endowments are small at most U.S. colleges, and much of this wealth is clustered in a handful of institutions.
Hillman told Higher Ed Dive that the large returns in 2021 caused him to worry about inequality. The article explains that “[Hillman] saw in the returns an example of a K-shaped recovery from the pandemic — a recovery lifting some sectors while leaving others to struggle.”
Hillman also noted that colleges without large endowments enroll the majority of the country’s low-income students and students of color. “Meanwhile,” he added, “a small slice of higher ed benefits most from large endowment returns.”
“This is a story of how the rich get richer in higher education and endowments are a critical tool for maintaining — and widening — inequality in U.S. higher education,” Hillman said. “When I hear about these endowments having double-digit returns, I think of the K-shaped recovery and I worry what it means for the long-term inequality of funding in higher education.”
To learn more, read the full article here.