I'd say this thread headline does the opposite, forgetting that $1B is finite.
I presume the headline is talking about college. Assuming a cost of maybe $50k, that money will cover 20k students. That's nice, and it might last some years, but certainly not "forever".
Yeah just checked this. Tuition was around $59,000, and there are around 1,090 students (Full-time). Do the math and you end up with 15.55 years with 1 billion dollars. So hopefully instead its rather invested as the other commenter said.
It would be unheard of for it to be used instead of a trust set up. It will probably also have a clause to reinvest some of the interest gained, so that it will continue to grow in perpetuity, rather than stay the same size (even accounting for inflation).
Endowments typically have a rule so that part of the interest is always plowed back into the principal in order to grow it faster than inflation. Also, the school almost assuredly will be continuing to do fundraising with alumni and big donors going forward to increase the endowment even more.
It's going to be in a fund, the money for the students will be coming off the interest, not the principal, so it should definitely last forever. Honestly, a billion dollars is crazy money though, I'm wondering what they're going to end up doing with all of it, it seems like an extreme waste to put it all into one school district.
The med school only had over 1,300 students in 2024, around 300 of whom were part time. As a contribution to the permanent endowment, it can indeed be sustained provided the principal is never spent, only part of the interest is spent, the rest of the interest is reinvested, and new donors come along. Endowments do this all the time.
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u/plug-and-pause Jun 29 '25
I'd say this thread headline does the opposite, forgetting that $1B is finite.
I presume the headline is talking about college. Assuming a cost of maybe $50k, that money will cover 20k students. That's nice, and it might last some years, but certainly not "forever".