When the markets were booming, billionaire colleges like Harvard, MIT and Stanford tapped their swelling endowments and launched spending binges on faculty, buildings and scholarships.

Now, they're seeing firsthand the one downside to relying on a huge nest-egg: The market crash has them confronting the sharpest budget cuts in memory.

A new survey released Tuesday reports college endowments fell 3 percent in the fiscal year ending June 30. In a follow-up, a smaller group estimated declines averaging 23 percent in the first five months of fiscal 2009, which began in July.

That decline is nearly twice as big as any full-year return since endowment performance was first tracked in 1974, said Brett Hammond, chief investment strategist at TIAA-CREF, which collected the figures with NACUBO, a college business officers group, and Commonfund Institute.

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The Associated Press