This is the Cato Daily Podcast for Wednesday, February 6, 2008.

I'm Caleb Brown.

A few dozen private universities have amassed massive endowments.

Harvard's endowment tops $30 billion, but tuition prices haven't

gone down. Enter Senator Charles Grassley, who has threatened these universities. If they don't

start using more of that money, they may face new rules aimed at loosening the purse strings.

Neil McCluskey, Associate Director of Cato's Center for Educational Freedom, gives his take. Most universities don't have massive endowments.

There are only 76 with endowments over a billion dollars, which you know seems like a lot but especially if you take into consideration

some of those are state schools with tens of thousands of students per people that's not that much

but what schools do with their endowments are a huge variety of different things because typically endowment money is given to a school by someone wealthy with a specific purpose.

So some of them could be to endow a specific chair in a department.

Some could be to get kids to, as was the case in Princeton, a big case with the Woodrow

Wilson School I think it was, but it was to prepare kids for public service.

Earmarked in other words.

Yeah, so right, and almost all of these,

or the vast majority of the endowment money

has specific purposes it's supposed to go to

that have been identified by the benefactors.

Now this is from the New York Times.

Skidmore in Saratoga Springs, New York is not exactly poor.

Its endowment reached $282 million last year, but the growth alone in Harvard's

endowment last year was 5.7 billion dollars a sum bigger than all but 14

...