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The average trade-in value of 2020 leased cars is 19% more than the predetermined residual value — a vehicle’s worth at the end of a lease — according to Edmunds data.
This means you may be able to capitalize on that difference instead of simply turning in the car.
Here are some options that may be available to you if your lease runs up soon.

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3.3 million cars were leased in 2020

An estimated 3.3 million leases were originated in 2020, according to Edmunds. That’s 18% lower than in 2019, before the pandemic upended auto sales.
And with few discounts being offered by manufacturers on new cars — whether you buy or lease — the share of people who lease has continued to fall. By mid-year 2022, leases comprised 18% of new-car transactions, down from 27.2% a year earlier.

While the latest inflation reading shows that used-car prices slid 11.6% from a year ago — the average paid in January was roughly $26,510, according to Kelley Blue Book — they remain elevated compared with where they’d be if normal depreciation were in play. 

“February 2023 trade-in equity is still more than double the pre-pandemic level,” said Thomas King, president of the data and analytics division at J.D. Power.

Leased models that have the most extra value

Among cars leased in 2020, the Mercedes-Benz GLS-Class has the highest dollar difference between current trade-in value ($62,257) and its originally estimated residual value ($50,942). That’s $11,315 (or 22%) more than expected. The Toyota Sienna has a trade-in value ($30,207) that’s $8,741 (or 41%) higher than the $21,465 residual value.

When it comes to the most popular 2020 leased cars, both the Honda Civic and Accord have trade-in values that are 31% higher than their residual values, the Edmunds data shows. That translates into positive equity of $4,430 and $5,065, respectively.

Consider buying out the lease and keeping the car

There are a few ways you may be able to take advantage of the positive equity.
For starters, it may be wise to consider buying out the lease when it ends, because you would be getting the car for less than you would if you were to buy it off a dealer lot.
If you want to try capitalizing on the positive equity as a trade-in or for cash, start by finding what your vehicle is worth. You can do this on sites like Carfax.com or Edmunds. Generally, the retail price will be a few thousand dollars more than you’d get by trading it in or selling to a dealership.

You may be able to sell it for profit

You also should determine the buyout amount, which is generally the same as the residual value if you wait until the lease is up (this information is in your contract). You may be able to buy it out early, although there could be fees involved in doing so. You could also just buy out the lease and then turn around and sell the vehicle for more in the open market.
Additionally, check whether your financing company allows you to sell the car to any dealer you want (a so-called third-party buyout). Some automakers have restricted this practice and require you to return the car to one of that brand’s dealerships (i.e., return a Honda to a Honda dealer).
If you are allowed to sell the car elsewhere, you could shop it around to used car dealers to see where you could get the most, Drury said. If you can’t do a third-party buyout, you could sell back the car to one of the same brand’s dealerships instead of just returning it at the end of the lease.

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The Supreme Court on Tuesday will hear two legal challenges to the Biden administration’s historic student loan forgiveness plan.
Six GOP-led states brought one of the lawsuits, claiming President Joe Biden is overstepping his authority.
The second legal challenge was backed by the Job Creators Network Foundation, a conservative advocacy organization, and also accuses the president of abusing his power.

The U.S. Supreme Court in Washington, D.C.
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Here’s what 6 GOP-led states allege in their suit

On Sept. 29, six Republican-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — filed a lawsuit against the president’s plan, arguing that Biden was vastly overstepping his authority by moving to cancel hundreds of billions of dollars in consumer debt without authorization from Congress.

The Biden administration says that the Heroes Act of 2003 grants the U.S. Secretary of Education the authority to make changes to the federal student loan system during national emergencies. The U.S. has been operating under an emergency declaration since March 2020 because of the Covid pandemic. The Heroes Act of 2003 is a product of the 9/11 terrorist attacks, and an earlier version of it provided relief to federal student loan borrowers affected by the attacks.
However, the six states in question counter that the president’s recent loan forgiveness plan is far more broad than the type of modifications permitted by that law.

In other words, higher education expert Mark Kantrowitz said, the states are asserting that Biden is using Covid as an excuse to pass his plan.
“For example, if it was an emergency, why wait three years to provide the forgiveness?” Kantrowitz asked. “Why present it in a political framework, as fulfilling a campaign promise?”
Yet the Biden administration insists that the public health crisis has caused considerable financial harm to student loan borrowers and that its debt cancellation is necessary to stave off a historic rise in delinquencies and defaults.

The six states also argue that Biden’s plan would cause financial harm to their states, including a loss of profits for the companies that service federal student loans.

Two borrowers say ‘procedural rights’ were ignored

The second legal challenge the Supreme Court will consider Tuesday is backed by the Job Creators Network Foundation, a conservative advocacy organization.
Lawyers for the two plaintiffs, Myra Brown and Alexander Taylor, argue they were deprived of their “procedural rights” by the Biden administration because the White House didn’t allow the public to formally weigh in on the shape of its student loan forgiveness plan before it rolled it out. As a result, the lawyers argue, Brown and Taylor are either partially or fully excluded from the relief.
The Heroes Act exempts the need for a notice-and-comment period during national emergencies, but, like the states, the plaintiffs in this challenge argue that that law doesn’t authorize the president’s sweeping plan.

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As high inflation continues and interest rates go up, many people are seeing their savings dwindle and credit card balances increase.
As those debts become more expensive, delinquencies may be poised to increase.
Here’s what to do before you get overwhelmed by your debts.

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High inflation is leading to reduced savings and higher credit card debt — and there are some signs households may be reaching a tipping point under increased financial pressures.
A new survey from Bankrate finds 39% of individuals surveyed in January said their emergency savings are less than they were last year. Meanwhile, 10% still have no cash set aside – the same finding as in last year’s survey.

The results come as total household debt increased by 2.4%, to $16.9 trillion, in the fourth quarter of last year, the Federal Reserve Bank of New York announced last week. For all debt types, the share of current debt that became delinquent, where payments have not been made under the agreed terms, also increased in the fourth quarter.
An “ugly stew is brewing” as people buckle under the pressure of inflation, especially if they don’t have a lot of savings, noted Bruce McClary, senior vice president of the National Foundation for Credit Counseling.

Those individuals and families may turn to open lines of credit to help fill the gaps in their budgets — to pay for groceries or gas, for example. As interest rates rise, it has become harder to pay off those debt balances they’re carrying, according to McClary.
“It’s that combination of everything that is starting to push people over the edge,” he said.

More than a third — 36% — of the 1,032 respondents to Bankrate’s January survey said their credit card debt is higher than their emergency savings — a record high over the 12 years the poll has been conducted.

Still, slightly more than half of respondents — 51% — said they have more emergency savings than credit card debt. The remaining 13% have no credit card debt nor any emergency savings.

‘Younger workers are more financially fragile’

Younger generations are more likely to feel the financial strain, according to Mark Hamrick, senior economic analyst at Bankrate.
“Broadly speaking, younger workers are more financially fragile,” particularly if they are new to the work force, Hamrick said.
Bankrate’s survey found 45% of millennials, 44% of Gen Xers and 38% of Gen Zers have more credit card debt than money in savings. In comparison, just 25% of baby boomers said the same.

If we have one mantra, it is it pays to shop around for the best rate.

Mark Hamrick
senior economic analyst at Bankrate

Credit-counseling requests rise, as do stress levels

The New York Fed’s quarterly household debt and credit report found younger borrowers are showing signs of financial stress and are beginning to miss some credit card and auto loan payments.
The risk of delinquencies may continue based on the economy, according to Hamrick.
“Just having a job doesn’t solve the problem,” he said.
In recent months, the number of requests for credit-counseling sessions has increased, according to McClary. The number of people who receive a recommendation to start a debt-management plan after completing a counseling session is also up, he noted.

“We’re starting to see that uptick in volume,” McClary said. “That alone tells me that the number of consumer-credit delinquencies is likely going up.”
If you think you’re at risk of falling behind on your bills, do not wait to take action, McClary advised.
When people are facing delinquencies, they often skip the first step, which is to simply reach out and talk to their creditor, he said.
Renegotiating the terms of your debt early on may help avoid a financial disaster later on, McClary said.

If you don’t pay your account as agreed, that can have certain consequences. If your account is 30 days past due, you will likely incur a fee and also possibly a higher interest rate, which makes it more difficult to get back on track.
Once a bill is 60 days past due, a creditor is likely to report it to the credit bureau. Your credit score will likely be reduced, which can make it difficult to get the best rates on future loans or lines of credit, McClary noted.
Once it gets to 90 days past due, a creditor usually sends the bill to a collection agency and your account may be closed.
“The longer you wait without taking action, the worse your circumstances may get,” he added.
Contacting a nonprofit credit counseling agency for advice may also help connect you with a financial professional who can explain your options, McClary said.

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If you’re looking for a relatively safe place for cash, Treasury bills, or T-bills, have recently become more attractive, experts say.
Over the past year, T-bill yields have jumped following a series of interest rate hikes from the Federal Reserve.
Experts cover what to know before adding these assets to your portfolio.

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If you’re looking for a relatively safe place for cash, Treasury bills have recently become more attractive, experts say.
Backed by the U.S. government, Treasury bills, or T-bills, have terms ranging from four weeks up to 52 weeks, and investors receive interest when the asset matures.

Over the past year, T-bill yields have jumped following a series of interest rate hikes from the Federal Reserve — with the possibility of more to come. T-bill yields have been low since the Great Recession, with the exception of 2018.

“I think people are shocked that yields are as high as they are,” said certified financial planner Anthony Watson, founder and president of Thrive Retirement Specialists in Dearborn, Michigan.
Currently, shorter-term Treasury yields are higher than longer-term yields, which is known as an inverted yield curve. “What that means is the market is expecting rates to come down in time,” Watson explained. 
Still, T-bills yields are competitive when compared to other options for cash, such as high-yield savings accounts, certificates of deposits or Series I bonds, he said. Of course, the best choice depends on your goals and timeframe.

How interest rates affect bond values

Another factor to consider is the current economic environment, including future moves at the Fed.

That’s because of the inverse relationship between interest rates and bond values. As market interest rates rise, bond prices typically fall, and vice-versa.
Duration, another key concept, measures a bond’s sensitivity to interest rate changes. Although it’s expressed in years, it’s different from the bond’s maturity since it factors in the coupon, time to maturity and yield paid through the term.
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As a rule of thumb, the longer a bond’s duration, the more likely its price will decline when interest rates rise.
But when interest rates decline, T-bills won’t participate in that market value increase, Watson said. “They will start to underperform investment-grade corporate bonds once recession fears start to fade,” he said.

How to pick the right T-bill term

While it’s possible to sell T-bills before maturity, it can be tricky to pick the best term based on the current and future economic climate, experts say.
“It’s always the Fed; the Fed controls short-term interest rates,” said David Enna, founder of Tipswatch.com, a website that tracks Treasury inflation-protected securities and other assets.

He said the 26-week T-bill rates seem to reflect that investors expect continued rate hikes until that point. But terms past the 26-year, such as the 1-year T-bill, are “still pretty attractive.”
However, the looming U.S. debt crisis may also affect investors’ willingness to purchase T-bills maturing around the deadline, Enna said.
“It seems like a very small risk, but people will be aware of that as we get toward the summer,” he said.

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Retirement account balances in 401(k) plans lost nearly one-quarter of their value in 2022, according to Fidelity’s analysis.
Amid ongoing high inflation and economic uncertainty, nearly half of retirees expect to outlive their savings.

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In a year marked by stiff economic headwinds, retirement savers paid the price.
Although the average 401(k) balance rose in the fourth quarter of last year, balances ended 2022 down 23% from a year earlier to $103,900, according to a new report by Fidelity Investments, the nation’s largest provider of 401(k) plans. The financial services firm handles more than 35 million retirement accounts in total.

The average individual retirement account balance also plunged 20% year over year to $104,000 in the fourth quarter of 2022.

“Given all the stresses in the world today, such as natural disasters and geo-political events, Americans continue to confront challenging times in our economy,” Kevin Barry, president of workplace investing at Fidelity, said in a statement Thursday.
Still, the majority of retirement savers continue to contribute, Fidelity found. The average 401(k) contribution rate, including employer and employee contributions, mostly held steady at 13.7%, just below Fidelity’s suggested savings rate of 15%.
And despite the ongoing inflationary pressure straining most households, only 16.7% of plan participants had a loan outstanding from their 401(k) at the end of the year, Fidelity said.
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Federal law allows workers to borrow up to 50% of their account balance, or $50,000, whichever is less. However many financial experts similarly advise against tapping a 401(k) before exhausting all other alternatives since you’ll also be forfeiting the power of compound interest. 
A separate analysis from Vanguard also found that average 401(k) balances fell 20% in 2022 to $112,572, and hardship withdrawals ticked up slightly.
At the same time, many households also ate into their emergency savings over the course of 2022, other research shows.

Across all ages and income levels, at least one-third of adults said they are likely to have less in savings now compared with a year ago, according to a recent report by Bankrate.
“It’s clear that the less-than-optimal economy, including historically high inflation coupled with rising interest rates, has taken a double-edged toll on Americans,” said Mark Hamrick, senior economic analyst at Bankrate.

Many retirees expect to outlive their savings

The growing savings shortfall has many older Americans worried about their retirement security. Nearly half, or 48%, of retired Americans believe they’ll outlive their savings, a separate report by Clever Real Estate found.
“Everyone is feeling pressure financially — there’s a lot of uncertainty out there in the markets and the economy,” said Mike Shamrell, Fidelity’s vice president of thought leadership.
However, “a lot of people understand there’s going to be ups and downs,” he added. “Don’t let short-term economic events derail your long-term retirement savings efforts.”
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The current allure of financial stocks — the result of low valuations and high levels of capital — is especially strong as higher interest rates make lending money more profitable.
Large banks hold nearly twice the capital relative to their risk-weighted assets that they did before the financial crisis of 2008.
This sector is currently positioned for sustained earnings strength and likely price growth throughout the year and into 2024.

Credit card providers are benefitting from post-pandemic travel and increasing card usage in general, with balances way up in recent months.
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Financial stocks were so out of favor for most of 2022 that perhaps their tickers should have been appended with a Nathaniel Hawthorne-esque “U” — for “unloved.” Yet after some decent gains so far this year, the sector could draw suitors aplenty as 2023 progresses.
The present allure of financial stocks, stemming from low valuations and high levels of capital, is especially strong as higher interest rates are making lending money more profitable.

As of mid-February, the Financial Select Sector SPDR ETF had recovered about half its 2022 losses. Amid this comeback, robust earnings have kept the sector’s price-earnings ratios low, as reflected by XLF’s P/E of 14.5 in mid-February.

Buckets are out at the banks

Low share prices are the norm

Despite gains this year, share prices of this sector are still quite low, considering good earnings and a long history of corporate performance.  
One reason for the low prices is fear of recession. But even if the most widely anticipated recession ever actually becomes reality, assuming that the short-and-shallow camp turns out to be right, financial sector earnings could easily prove more resilient than normally expected in a downturn.

Also tamping down prices is long-term market perception, said Christopher Davis, portfolio manager and chairman of Davis Advisors in New York. Several months ago, he made the case that financials tend to be mispriced because they’re “widely misunderstood,” adding the sector was (and still is, in my opinion) “primed for long-term revaluation.”
Revaluation could be in the offing, as indicated by shifts in the sector’s technical indicators, especially those for diversified financial companies and insurance companies, following growth in the latter this year. As of late February, Invesco KBW Property & Casualty Insurance ETF was up more than 14% over the preceding six months. After taking big hits from Hurricane Ian last year, insurance companies are getting more respect from analysts now that they are on firmer footing in fairer weather.

A close haircut for regional banks

Regional banks, which took a close haircut early last year after hitting a five-year peak in January, are also recovering. The bellwether ETF for this group, SPDR Regional Banking, was up nearly 9% year to date as of mid-February. Many regional banks have recently been buying back shares to support a floor on prices and give shareholders more total return without getting locked into dividend increases.
Meanwhile, credit card providers are benefitting from post-pandemic travel and increasing card usage in general, with balances way up in recent months. Also positive are prospects for exchanges and data providers, a sector category whose earnings in recent years have grown twice as fast as those of the S&P 500.

Here are some attractive financial stocks with strong growth prospects and fundamental metrics signaling low downside risk:

Truist Financial: Formed in 2019 by a merger of equals — regional banks BB&T Corp. and SunTrust — Truist is now the nation’s seventh-largest bank, with a capitalized ratio nearly twice what’s required by regulators. Truist’s dividend has more than doubled in the last 10 years. Post-merger kinks typically dampen companies’ share price growth, so Truist’s recent underperformance relative to KRE was expected. And Truist’s growth could exceed peers’ because it operates in rapidly growing regions — primarily, the mid-Atlantic and Southeast.

East West Bancorp: This is a fast-growing, full-service commercial bank with locations in the U.S., serving the Asian-American community, and in China. Shares were up nearly 19% year to date as of mid-February. This growth is expected to accelerate from China’s reopening from Covid lockdowns. CFRA has this bank as a strong buy, forecasting 2023 growth of 17% to 19%, in part because net interest income currently makes up 89% of its revenue, versus 73% for peers. Also, the bank has “no exposure to mortgage banking or capital markets, which have been severely impacted by rising rates and economic uncertainty,” CFRA states, citing balance sheet momentum, a discounted valuation and the advantage of a Chinese population in the U.S. that’s growing faster than the whole.

FactSet Research Systems: FactSet is the star of the sector’s data-provider segment. It’s an interesting, attractive play with recurring revenues of 98%, largely because financial firm customers rely so heavily on FDS’s data. You can see it cited on brokerage platforms and analyst reports. FDS’s software, data and analytics supports the workflow of both buy-side and sell-side clients. Customers include asset managers, bankers, wealth managers, asset owners, hedge funds, corporate users, and private equity and venture capital professionals. The company has an excellent track record of maneuvering through tough economic times, evidenced by its top-line sales growth for 42 consecutive years and annual dividend raises for the last 23 years. The difficulties of changing data providers amount to an economic moat that’s daunting to competitors.

American Express: This is the right business at the right time, with business travel improving, China reopening and consumer spending among the affluent strong. Revenue growth went from a 10-year stretch of 2% annually to 25% in 2022, with 17% growth forecast for this year. Connecting better with millennials and Generation Z customers than its peers, American Express is acquiring new cardholders at an increasing rate. Analysts expect earnings to rocket up 30% over the next two years, while those of competitors appear likely to shrink. And because of well-heeled customers, this company has less credit risk than its peers.

Chubb: Chubb is the world’s largest publicly traded property and casualty insurer, operating in 54 countries but with 60% of its revenue from North America. CB has a market-leading position in industrial, commercial and mid-market traditional and specialty property-casualty coverage. It is also a leader in high net worth personal-insurance coverage, a category unlikely to feel pain from an economic downturn. Chubb has high-quality underwriting, but shares are trading at a discount to peers with lower-quality underwriting. Higher premiums, a 98.4% customer-retention rate and higher interest rates should all contribute to strong earnings growth, and shares are widely viewed as significantly undervalued.

The current, higher rates aren’t going down anytime soon. This sector is currently positioned for sustained earnings strength and likely price growth throughout this year and into 2024.
— By Dave Sheaff Gilreath, CFP, partner and chief investment officer of Sheaff Brock Investment Advisors LLC and Innovative Portfolios LLC.

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Defaulting on federal student loans can trigger other major financial consequences for borrowers, including a lower credit score and wage garnishment.
A new Department of Education program gives those who’ve fallen behind on their student debt a limited chance to get into current standing.

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Falling behind on federal student loans is likely to trigger other major financial consequences for borrowers, according to new research by The Pew Charitable Trusts.
More than 80% of borrowers who experienced default stated that they’d faced at least one additional consequence as a result. The most common impact was a drop in their credit score (62%) followed by being subject to collection fees (47%) and losing eligibility for future federal financial aid (37%).

Other consequences that followed from a default on federal student loans included wage garnishment, the suspension of professional licenses and having Social Security or tax refunds offset.
(The research organization NORC at the University of Chicago conducted an online survey on behalf of Pew in the summer of 2021 studying borrowers’ experiences, focusing on those who had defaulted on a federal student loan. The sample included 1,609 respondents.)
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“Low credit scores can make it harder to get other kinds of credit that are important to borrowers’ financial lives, like home loans, car loans and credit cards,” said Phillip Oliff, director of Pew’s student loan research project. “Despite these penalties, rates of default and redefault are alarmingly high.”
Most recently, U.S. Department of Education Undersecretary James Kvaal said that if the government isn’t allowed to carry out its sweeping student loan forgiveness plan, there could be a “historically large increase in the amount of federal student loan delinquency and defaults as a result of the Covid-19 pandemic.”

Many unaware of consequences of default

The Pew survey found that many borrowers aren’t aware of specific consequences of defaulting on their federal student loan debt. A third or less of respondents knew, for example, about the possibility of collection fees or wage garnishment prior to falling behind.
“The consequences of default are not just punitive but also intended to recover the funds for the federal government,” said higher education expert Mark Kantrowitz.
In addition to the financial setbacks, respondents reported “a high emotional toll” connected to experiencing the consequences of default “with themes of sadness, depression and anger.”

A borrower is typically considered to be in default when they’ve been past due on their debt between 270 days and 360 days.
Federal student loan payments have been on pause since March 2020, when the coronavirus pandemic first hit the U.S. and crippled the economy. They’re scheduled to resume 60 days after the legal troubles over the Biden administration’s student loan forgiveness plan resolve, or by the end of August, whichever comes sooner.
Collection activity on the debt remains on pause as long as the bills do.

Defaulted borrowers get a ‘fresh start’

Fortunately, the U.S. Department of Education is also providing federal student loan borrowers who’ve fallen behind on their debt a chance to get into current standing.
As part of its “Fresh Start” initiative, the 7.5 million student loan borrowers who are in default are able to return to repayment without a past-due balance. The program was announced last spring.
Once it officially launches, borrowers will start by choosing a repayment plan at MyEdDebt.Ed.Gov or by calling the Education Department’s Default Resolution Group at 800-621-3115, Kantrowitz said.

Your loans should then be transferred from the Default Resolution Group, which is run by Maximus, to a new servicer.
After you’ve been matched with a new servicer and are enrolled in a payment plan, the default should be automatically cleared from your record, Kantrowitz said.
The opportunity is temporary, however. Borrowers will have a one-year window to switch into a new repayment plan and to start making payments when the Covid suspension of bills concludes, which could be as early as May. Take action as soon as you’re able, Kantrowitz added, “to avoid the last-minute rush.”

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Even as college applications surge, a number of institutions are in financial jeopardy.
Smaller, less selective schools have been the hardest hit, while the country’s most elite colleges and universities continue to thrive.

Citing inflationary pressures and sinking enrollment, more colleges are set to close in 2023.
Already, Presentation College in Aberdeen, South Dakota; Cazenovia College in Cazenovia, New York; Holy Names University in Oakland, California; and Living Arts College in Raleigh, North Carolina, announced they will shut down after the current academic year.

The consequences of fewer students and less tuition revenue since the start of the pandemic have been severe, according to Kristin Reynolds, a partner and leader of NEPC’s Endowments and Foundations practice.
“Larger institutions can weather the storm,” she said.
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The number of colleges closing down in the past 10 years has quadrupled compared with the previous decade, according to a report in The Wall Street Journal.
Not only have many smaller institutions struggled as students opt for less expensive public schools or alternatives to a four-year degree altogether, but economic uncertainty and inflation also continue to weigh on markets, taking a hefty toll on endowments and leaving more colleges and universities in financial jeopardy.

Meanwhile, the country’s most elite institutions are thriving.

College applications jump

Harvard University campus in Cambridge, Massachusetts.
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Coming out of the pandemic, a small group of universities, including many in the Ivy League, experienced a record-breaking increase in applications this season, a report by the Common Application found.
The report said the number of college applicants has jumped 20% since the 2019-20 school year, even as enrollment has slumped nationwide, suggesting more students are applying to the same schools.
“For brand-name colleges, the demand is off the charts,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. “It’s never been harder to get in.”

The majority of people are going to say, ‘Is that worth my while?’

Hafeez Lakhani
founder and president of Lakhani Coaching

On the other hand, private colleges that are less prestigious but equally expensive are struggling to attract applicants, he added. “The majority of people are going to say, ‘Is that worth my while?'”
College is becoming a path for only those with the means to pay for it, other reports also show. 
And costs are still rising. Tuition and fees plus room and board for a four-year private college averaged $53,430 in the 2022-2023 school year; at four-year, in-state public colleges, it was $23,250, according to the College Board.
Now, the majority of applicants hail from the wealthiest zip codes, the Common Application found.

Higher education endowments take a hit

Although the investment performance for college and university endowments sank in 2022 overall, the losses were not shared equally across the board, according to a separate report by the National Association of College and University Business Officers.
Colleges and universities with the largest endowments, or more than $1 billion in assets, performed better than smaller schools with less than $25 million, which were the weakest performers, posting average returns down 11.5%, compared with an average loss of 4.5%, the report found. 

Arrows pointing outwards

As a result, universities such as Harvard, Yale, Stanford and Princeton are able to maintain or even expand their financial aid offerings, lowering the cost and increasing the appeal to more students nationwide.
“The largest endowments are able to support their schools a little bit more,” Reynolds said. “These colleges are continuing to attract students through scholarships and that makes them more competitive.”
That means other schools will only continue to struggle, Lakhani predicted. Going forward, “more colleges will either close departments or shut down,” he said.
Correction: This story has been updated to accurately state the academic year Common Application used to calculate the percentage increase in the number of college applicants. An earlier version incorrectly cited the increase as year over year.
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