Meyer made the richest university in the world even richer: Harvard's endowment quintupled under his leadership, to $25.9 billion in 2005 from $4.7 billion in 1990. By the time Mendillo took over, Harvard had $36.9 billion, $14 billion more than No. 2 Yale, her alma mater.

Harvard counted on its burgeoning wealth to finance its ambitions. The school boosted salaries for faculty, recruited top researchers, promised free education to low-income students and extended financial aid to families earning $180,000 a year or more.

50-Year Plan

In 2007, Harvard announced a grandiose 50-year expansion plan that envisioned adding as many as 12,000 jobs and 10 million square feet (930,000 square meters) of new space, including a $1 billion science center in Allston, across the river from the main campus in Cambridge.

"Harvard made more plans than it so far has been able to pay for," says Lawrence Golub, 51, New York-based chairman of private investment firm Golub Capital and a Harvard donor.

The school also increased its dependence on the endowment fund's returns. Under its mandate from Harvard Corp., which runs the university, Harvard Management has to use its profits to supply a set percentage of the university's operating expenses. That was 38 percent of the $3.8 billion annual budget in fiscal 2009, up from 23 percent a decade earlier.

The spending boom was a massive miscalculation for an institution purported to be run and frequented by some of the smartest people in the world.

Harvard admitted just 1 in 14 applicants for the class of 2014. It has educated eight U.S. presidents, including Franklin D. Roosevelt, John F. Kennedy and Obama. Many Nobel Prize winners have been associated with the 374-year-old institution, either as students, professors or researchers.

Hot Breakfasts

On a recent afternoon in Harvard Yard, students sit under the trees typing on their laptops, and there are few overt signs of the cutbacks the school announced after the crisis. Some staff at residence halls has been trimmed, and one of the libraries has been shut. Students complain that the school scrapped hot morning meals in dorm dining rooms.

First « 1 2 3 4 5 6 7 8 9 10 » Next