[closeparen]

Endowments are there to provide "passive income" for the university and not to be spent. One of the main things interest on an endowment funds is financial aid. Endowment size is a pretty decent proxy for how generous a financial aid program is.

Spending down an endowment could provide lots of free tuition... for a few years. Universities (like the Church) think in centuries.

[Fomite]

Pretty much this. Whether or not my alma mater could go to a "need blind" admissions policy was entirely a function of whether or not the endowment was in the right shape.

IIRC they managed it in 2007 and then...in 2008...well, that went away.