January 3, 2003

Endowments' Investments Lost 6% in 2001-2

By JOHN L. PULLEY

College endowments lost 6 percent on their investments during the 2001-2 academic year, according to a new survey.

Reeling from a second consecutive year of negative investment returns, the typical institution made ends meet by spending a larger proportion of its endowment than it had in recent years. Endowments returned 3 percent, on average, in 2000-1.

Nearly one in eight institutions tapped into endowment principal instead of spending investment income only. Among smaller

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