Big Endowment Gains Could Expand Campus Budgets

Students and families at wealthy private universities should watch how these fiscal 2026 gains shape financial aid and costs.

Updated on Nov. 2, 2026 in Financial Aid

Wide view of a weathered limestone academic building across a green lawn, with a brick walkway and a large oak casting shadows in soft afternoon light. — Stanford University's endowment returned 31.7% for fiscal 2026, lifting its pool to $61.5 billion as other wealthy schools also posted gains above 20%. AI Illustration. Upload story photo >

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Stanford University's investment pool returned 31.7% for fiscal 2026, bringing its total to $61.5 billion. Several other wealthy universities also reported endowment returns above 20% for the same year.

Why it matters

Strong endowment returns can flow into operating budgets that help fund financial aid and student programs, so these gains bear on how much schools can put toward affordability. Several schools reported that their returns came in well above what they had budgeted.

Stanford's investment funds are set to add over $2.2 billion to its fiscal 2027 operating budget, and Yale will pay an 8% earnings tax on its endowment, up from 1.4%. Penn's endowment grew 27.4% to $31.1 billion, its largest one-year dollar jump on record.

The players

Stanford University

A private research university in California whose large endowment supports its operating budget and student aid.

University of Pennsylvania

A private Ivy League research university in Philadelphia with a multibillion-dollar endowment.

Washington University in St. Louis

A private research university in Missouri whose endowment reported a 37.3% gain in fiscal 2026.

Yale University

A private Ivy League research university in Connecticut that will face an 8% endowment earnings tax.

S&P Global Ratings

A credit rating agency that published a September 2025 report on elevated endowment draws at colleges.

The details

Endowment returns are reported as annual percentage gains on the investment pool, and the dollar growth depends on both the return and the starting balance. Schools typically draw a portion of the endowment each year to support operations, so higher returns can raise the amount available for the next budget cycle. WashU's growth was driven in part by a $50 million investment in SpaceX made a decade ago, which now represents 10% of its portfolio. Yale's new 8% earnings tax on its endowment is a separate cost that rises from 1.4%.

Fiscal 2026 returns were reported for Stanford, Penn, WashU, Yale, Princeton, Brown and Dartmouth.
Stanford's investment funds are set to add over $2.2 billion to its fiscal 2027 operating budget.
WashU officials expect a healthy increase in its endowment payout rate for fiscal 2028.

Education Landscape

These fiscal 2026 gains follow months of budget cuts at schools such as Princeton, which had based planning partly on expectations of lower future investment returns. The strong results contrast with that earlier caution and show how volatile endowment income can be from one year to the next.

Families comparing schools may want to ask each financial-aid office how endowment income factors into its aid budget for the coming year. Students at schools facing new endowment taxes or shifting payout rates should ask how those changes could affect future aid packages.

The takeaway

Strong endowment returns can help schools fund operations, but they do not guarantee changes in aid, and yearly results vary widely. Ask a school's financial-aid office how its endowment income is used before assuming it will affect your own costs.