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Studies from 2009 are revealing a drastic decline in university endowments. The Council for Aid to Education found that donations to colleges and universities fell 11.9 percent in 2009, the largest ever recorded drop in a single year. The drop adjusted for inflation was a close second only to the decline in 1975 (11.6 percent to 11.5 percent). The survey also found that schools' reported endowments fell 22.3 percent.

The non-profit Commonfund Institute also examined this issue, looking at the endowments of 842 schools. Their study found that in the year 2009 universities lost an average of 18.7 percent from their endowments.

In particular, Texas A&M University System’s endowment fell from $16.2 billion in 2008 to 12.2 billion in 2009.  But University officials from the Texas A&M System insist that there is no need to panic.

“This year, we’re fine,” says Vice Chancellor for Treasury Services Gary Anderson in The Battalion, the student newspaper of Texas A&M. "Next year, we should be in good shape. Only if there's a prolonged downward market will there be decreases that are significant."

Endowment strength is typically assessed over the course of multiple years. Taking the last three years into account, reports reveal only a 2.5 percent decline. And a look at the last ten years shows an average endowment increase of four percent per year.

“I believe the situation will be an issue only if tuition rates increase as a direct result," said student Fabian Hernandez.

Like most universities, University of Texas and Texas A&M University System spend four to five percent of their endowments each year. The shrinking endowment may be easier for some schools than others, but it will inevitably affect how most schools can spend money.

"No matter how good we think we are, we've got to reset our expense line," said Kevin Hegarty, vice president and chief financial officer at UT Austin.

More from the Council for Aid to Education
More from The Battalion Online at Texas A&M University
More from Commonfund