Colleges Shouldn't Be Run Like a Hedge Fund - Millennial Money with Cliff Mason

BIO

Cliff Mason is the author of Millennial Money. He is the Senior Writer of CNBC's Mad Money with Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Rich and Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like. Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.

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Mar.02

4:33 PM ET

Monday, 2 Mar 2009

Colleges Shouldn't Be Run Like a Hedge Fund

Posted By:Cliff Mason

Topics:Colleges & Universities | Stock Market

Companies:ITT Educational Services, Inc. | DeVry Inc | Apollo Group Inc

How unbelievable is this: in order to raise money after its endowment took a 19 percent hit in the second half of 2008, The University of Pennsylvania has increased the price of undergraduate attendance by 3.8 percent. Other private universities have been slashing financial aid in order to compensate for their shrinking endowments.

At a time when fewer and fewer people can afford to pay for college, these schools are going out of their way to make higher education even more expensive. Their justification? Oh, well, the huge pools of money that they manage, which before last year had been on a roll, haven't done so well lately. Since when did Penn or Harvard or Yale become for-profit institutions?

Does anyone remember tuition going down back when University endowments were soaring? Didn't think so. What are the people running America's top schools thinking? When our endowments make boatloads of money, we have to increase tuition! When they lose money, increase it some more! Poor Penn's endowment has shrunk to a mere $5 billion, give or take a few million.

Repeat after me: a University is not a hedge fund, and it shouldn't be run like one. You'd think this would be obvious right? Apparently not to the people in charge of these Ivy League schools. They seem to care more about their endowments then their students. But what's the point of having all that money if you don't spend it on anything useful?

Look, it's one thing if the University of Phoenix Online [APOL Loading... () ], DeVry [DV Loading... () ], or ITT Tech [ESI Loading... () ] want to raise tuition right now. They're all for-profit, publicly traded companies that exist to make money.