Despite the recent stock market retreat, colleges and universities which have seen their endowments grow dramatically over the past several years are thinking about spending a bit more in the near future -- but they are doing so cautiously.

• One dozen schools now have endowments worth $3 billion or more -- up from six just two years ago.

• Universities usually spend no more than 4 percent or 5 percent of their assets each year -- even if investment gains for the year are around 20 percent or more -- and they base their calculations of average assets over three, four or five years.

• Some schools are using their funds to moderate increases in tuition, while others are adding to financial aid packages.

• Building and maintenance -- an area that schools often scrimp on in lean years -- are also getting new emphasis.

For instance, Yale University is planning to add new faculty positions for the first time since 1992. Columbia University , which is already in the middle of a building program, is considering expanding it.

The Massachusetts Institute of Technology will use its extra income to help offset reductions in federal research money. While some other schools face the same problem, government-sponsored research plays a larger part in MIT's budget than it does at most other institutions. Cuts have forced it to replace about $55 million a year in revenue.

Source: Karen W. Arenson, "Ballooning Endowments Prompt Rich Universities to Loosen Their Belts," New York Times, October 21, 1998.