Given this stark picture, “you have a lot of people arguing that the pay for presidents is out of line for someone in a nonprofit education role,” Bauman said. But can the same be said for burgeoning endowments?

Made up primarily of donations and investment income, endowments are fueled by a culture of philanthropy, aggressive investment strategies and tax breaks for donors. The idea of a multibillion-dollar endowment has its roots in the aftermath of World War II. Years after veterans flooded colleges, thanks to the G.I. Bill, the more successful among them began to give back. By 1962, Harvard was getting close to the $1 billion mark.

As the generosity added up, administrators began sticking assets into essentially yield-less treasury bills and investment-grade corporate bonds. In 1969, a study funded by the Ford Foundation questioned that model, asking whether universities were squandering a tremendous source of capital. By the mid-1970s, schools were dipping into equities. Hedge fund investing started in the 1980s and, by the end of that decade, colleges were partnering with private equity funds. In 2007, as many as 72 schools had more than $1 billion, but the recession that followed drove that number down. By 2016, about 800 U.S. universities combined for more than a half-trillion dollars in endowment assets, according to an industry survey. 

So why don’t colleges use more of that money to lower tuition?  Spending down an endowment isn’t as simple as making a withdrawal, said Rotherham. “So much money is restricted, and people don’t really appreciate this,” he said. “You can’t just turn around and spend it wherever you want.”

Many major donors insist their funds be used for specific purposes. Others don’t even give money. Princeton University, for example, would struggle to convert the largest gift in its history into tuition assistance: a collection of 2,500 rare books valued at almost $300 million. Princeton, whose endowment hit a record of $23.8 billion in the last fiscal year, said it has allocated $200 million from the fund over the next few years to build more facilities, including dorms.

Yale said endowment spending at the New Haven, Connecticut, university last year exceeded the investment return. The value of its fund fell from $25.6 billion in 2015 to $25.4 billion in 2016, spokesman Tom Conroy said. “Yale spends significant endowment funds,” he said. “The endowment provides a third of Yale’s revenue, while net tuition and fees is less than 10 percent. The endowment, of course, supports many purposes in addition to financial aid.”

There is an effort to free up more endowment money to help students. A “no-loan” trend for those with financial need has emerged, said Ken Redd, senior director for research and policy analysis at the National Association of College and University Budget Officers. For families with too much income to qualify for aid, but not enough to pay $60,000 in annual college costs, schools such as Princeton and Harvard have replaced federally subsidized loans with grants paid for by their endowments, annual giving and richer students who pay full price, Redd said.

At Dartmouth, spokeswoman Amy Olson said, the “endowment plays a critical role in funding our priority of meeting 100 percent of the demonstrated financial need of every undergraduate student.”

As Wall Street drives the stock market ever-higher, a new class of universities has joined the billionaire club. Amanita Duga-Carroll, a spokeswoman for Vassar College, said the Poughkeepsie, New York, school crossed the finish line this year thanks to double digit investment returns. At the University of Maryland, similar good news helped the College Park research institution achieve the mark. But these freshmen aren’t planning to rest on their laurels.

“Our sights are set on much bigger growth in the coming years,” said Bill Wojcik, chief operating officer of UMD’s foundation.