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Colleges cope as endowments pinch

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Despite the losses, most institutions, particularly those with large endowments, are expected to make financial aid a top priority. "There's a lot of hiring freezes or slowdowns going on, but ... student financial aid is one of those things, in bad economic times, where you don't want to reduce support," says John Walda, NACUBO's president and CEO.

Harvard, Princeton, Yale, and Dartmouth, for instance, all draw more than a third of their operating budgets from their multibillion-dollar endowments, but they've announced their intent to maintain financial aid – including relatively new policies to give more help to low- and middle-income families.

Less of a tuition increase

Princeton has gone a step further on affordability: On Monday, it announced its lowest undergraduate tuition and fee increase since 1966 – 2.9 percent. Next year's charges will top $47,000, but the average grant to students on financial aid is nearly $34,000. Also, Princeton is increasing its undergraduate scholarship budget by 13 percent.

"Even though [Princeton is] much less wealthy than before, they're not going to try to compensate for that through tuition increases," Ms. Baum says. "We don't know yet how many other similarly fortunate institutions are going to do that, but it wouldn't be surprising if they take that approach."

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