In 2009, the recession put a heavy strain on university endowments, but things seem to be turning around, according to the comprehensive Nacubo-Commonfund Study of Endowments, released last Wednesday.

The value of endowments increased an average of 11.9 percent for the fiscal year of 2010, which ended in June, nearly making up for 2009’s losses. They decreased an average of 18.7 percent in the last fiscal year. The gains follow a 14.4 percent increase of the S&P 500, a commonly-used stock performance benchmark.

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Fueled by endowment gains and tuition increases, universities in recent years have gone on a building, faculty and program expansion spree. I have personally seen it in the law school realm. Instead of the historical 12-credit loads, the norm over the past few years in law schools has trended towards nine to ten credits. This allowed for more research, but also meant that the faculty needed to expand to continue offering the same course levels. Salaries also rose as law schools and other areas of universities competed for top talent.

But the same forces buffeting the general economy are affecting the university.

Yale recently froze all faculty salaries for employees paid more than $75,000, and Harvard froze all faculty salaries at its arts and sciences school. The big private, elite universities appear to be particularly at risk. To understand why, let’s take a look at the Harvard endowment.

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Harvard University