By Camaron Abundes
ODESSA- It's a complicated system but losses of the University of Texas endowments, are easy to track. According to the Associated Press, U.T. has lost some 4 billion dollars in it's endowment funds. At the Permian Basin Campus, University President Dr. David Watts says the losses are in the millions, but it is only one part of the story.
"You don't lose the money until you cash it in and we aren't allowed to cash it in," Dr. Watts said.
Endowments are private donations to a University that are invested by the University of Texas Investment Management Company. Dr. Watts says the U.T.P.B. endowment fund dropped from its height of more than 18 million in 2007 to 13.6 million in November of 2008, the most recent figures. The principal investment stays in the market and Dr. Watts says the University only uses a percentage of the interest earned based on a rolling three year average of its earnings.
The bulk of U.T.P.B.'s budget comes from state appropriations, tuition, grants and research funding. According to Dr. Watts only a small part of the UT Permian Basin budget comes from endowment funding, but the bulk of what is used goes to scholarships and hiring faculty.
"Our endowments, while they're down in their paper value, those actual earnings are actually at a very steady rate," Dr. Watts said. He says students will not see the effects of the losses.
Texas Christian University lost 100 million, according to the Associated Press in 2008.
"One of our advantages is that we don't have a large part of our operating costs based on endowment earnings," Dr. Chris Forrest, Vice President of Business Affairs for U.T.P.B., said..
Dr. Forrest says they hope and anticipate the market will turn around in the coming years.