How America's Universities Became Hedge Funds

Have you seen this article by Bob Samuels from Huffington Post, January 28, 2010?
Quote:
"In August 2009, just one month after the state of California cut over a billion dollars from its higher education budget, the University of California (UC) turned around and lent the state $200 million. When journalists asked the UC president, Mark Yudof, how the university could lend millions of dollars to the state, while the school was raising student fees (tuition), furloughing employees, canceling classes, and laying off teachers, Yudof responded that when the university lends money to the state, it turns a profit, but when it spends money on salaries for teachers, the money is lost.

Welcome to the university as hedge fund world. In this strange new world, institutions of higher learning care more about interest rates than educational quality. In fact, Harvard cared so much about reducing the cost of borrowing money that it made several expensive credit default swaps, which resulted in a loss of hundreds of millions of dollars and the halting of an ambitious expansion plan. Not only did Harvard gamble on interest rates to support future construction plans, but it moved much of its endowment into high risk investments, and the result is that the world's wealthiest education institution is now claiming poverty."

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