Top colleges in the US, such as Yale, Stanford and Harvard, are facing an unprecedented slump in the value of their endowment funds resulting in a cash squeeze, just as they are getting record numbers of applicants and more requests for financial aid.

College endowments fell in value by an average of 24 per cent in the six months to December, with smaller ones falling more, according to a survey by the Commonfund, a non-profit organisation.