On March 31, NYU sent a letter to Senator Orrin Hatch, Congressman Kevin Brady and Congressman Peter Roskam in response to their questions about the university’s endowment. The letter detailed the complicated array of restrictions and regulations that have kept the school from properly allocating funds towards scholarships and other high-interest areas for students. It also revealed that only 26 percent of endowment spending is specifically allotted to financial aid. The letter further emphasized the depth of the issue of affordability and the unavoidable ramifications for NYU students if our endowment troubles are not addressed both fully and quickly.

The letter quantifies and confirms what Hamilton and the administration have consistently highlighted as one of the largest problems facing the university: for a school of our size, we have a miniscule endowment. The total value of NYU’s endowment is $3.5 billion, which works out to only $89,000 per student. In fiscal year 2015, NYU spent a total of $145 million from the endowment; this only made up four percent of the year’s budget. The endowment itself may also be in dire financial straits — the value of the endowment only grew 1.19 percent, or $38 million, in fiscal year 2015, one-sixth of the previous year’s return.

What this small and fickle endowment means is that NYU is overwhelmingly a tuition-dependent university. Compared to four percent of endowment, over 60 percent of the university’s operating budget comes directly out of students’ tuition. The vast majority of the financial aid does not come out of the organic returns of the endowment, but instead as a discount on student tuition. As the NYU letter explains, this means that nearly every dollar that goes into financial aid is a dollar out of the budget, which is in turn a dollar out of another student’s pocket. Financial aid, as it stands, is in a precarious position. The letter lays bare the fact that the university is mostly living hand to mouth.

The letter does not afford many clear solutions. Rather, it proves that the question of management is far murkier than students may believe. When a massive global private research university of 57,000 students relies almost exclusively on tuition for operations and aid, tuition will continue to be a significant burden for all students. Instead of a vast and accessible endowment as a source of money like other smaller private schools enjoy, NYU must draw largely from students and their families directly. The model of the large endowment as “intergenerational stewardship,” as NYU’s letter calls it, is more noble and much more sustainable. But in order to attain this model, the administration has a long road of restructuring and reappropriation ahead of it.

A version of this article appeared in the Monday, April 11 print edition. Email the WSN Editorial Board at [email protected].