US: Harvard's endowment plunges $8 billion

Harvard University's endowment lost more than $8 billion in four months, a 22% plunge that is the steepest decline at the school in modern history, reports The Boston Globe. The loss brings the endowment from $36.9 billion on 30 June to roughly $28.7 billion by the end of October.

President Drew Faust and Executive Vice-President Edward C Forst outlined the impact of the loss in a letter to the university's deans. "To put a loss of that size in historical context, over the last at least 40 years, Harvard's worst single-year endowment return was a negative 12.2% in 1974," the letters reads, "and at that time our endowment stood at less than $1 billion and funded a much less significant proportion of University operations."

Harvard, MIT, Dartmouth, Boston University, and scores of other colleges have announced hiring freezes and budget cuts to counteract their shrinking endowments. Many institutions rely on revenue generated by their endowments to cover operating costs, which in Harvard's case is 35%.
Full report on The Boston Globe site
Full Faust-Forst letter on The Boston Globe site