The Wall Street Journal reports that the National Association of Colleges and University Business Officers survey last year reveals 62 colleges with endowments in excess of $billion. Yale is increasing its spending next year by $307 billion to $1.15 billion which approaches 5% of their $22 billion endowment. Overall Yale’s endowment fund has doubled since 2003 yielding an 18% annual return on funds invested. Foundations are required to spend 5% of their endowments and many universities spend less. Yale also announced they will increase the student body from 5,300 to 6,000. With tuition running $40 - 45,000 per student one might think Yale could spend a tad more on tuition aid than their website says they have committed for 2007-8 which is $70 million. 6,000 students at $45,000 per is $270,000,000.00 a princely sum to be sure but also an amount less than the planned increase in spending for 2008. What would the face of college education look like if Yale was free? They certainly could afford to go tuition free but without tuition how would they ration the supply of education. Would not everyone go to Yale, Harvard et al if they could afford it? If they go completely merit based on grades – then only the sons and daughters of our best and brightest would have access to the school. Would the “aid” then be accepting B students? This will present a huge challenge for schools blessed with generous donors and alumni and outstanding endowment fund managers.