Jim (cont'd):

Here is something that should infuriate every parent who is hoping to cover the cost of college for their children… and for every college student who is shouldering thousands of dollars of student loans to cover the costs themselves… the University of Pennsylvania just jacked up the cost of undergraduate attendance by 3.8% to just under $50,000 a year… why did they do this in the middle of the worst economic downturn since the Great Depression… why do the people running Penn, my sisters alma mater… think they need to make tuition even more expensive… you will love this… you know why, because their endowment lost 19% of its value in the second half of 2008... and virtually every other private university is cutting back on financial aid for the same reason… to compensate for being less well-endowed… but it is not like they are broke.

Penn still has $5B in its endowment… and that is small for an Ivy League school.. shouldn’t they be using that money… for years university endowments soared in value, the people running them were considered geniuses, and the schools made boat loads of money with their investments…. let me ask you, do you remember any of them lowering the cost of tuition when they were flush with cash… did any Ivy League school ever say, well our endowment is up double digits this year so we are going to help out our students and help out families by lowering tuition… nope… when the endowments were making lots of money, these schools raised tuition… now that their endowments have been pancaked, they are either raising tuition or slashing financial aid… what is the logic here… I think the tail is wagging the dog… these schools are putting their endowments first and their educational mission second… weird, given that they are supposed to be non-profit and they solicit millions of dollars of donations every year from alumni.

Universities are being run like hedge funds… as my writer Emmanu Ensis, and nephew, Cliff Mason, pointed out in his unbelievably great must read Millennial Money blog on CNBC.com, I think the best column… I read it right after the show is over… hey, a little nepotism never hurt anybody, especially when it comes to college admissions… I think that this situation is outrageous… colleges should use their endowments to fund education… they shouldn’t use the tuition they get from students to help offset short falls in their endowments… and if you are an alum, here is what I would do, think twice before you donate to a school that care more about their hoard of cash than higher education at a time when student loan money seems to be drying up by the day.