Scholarships and student aid at the University of Ottawa could be reduced if U.S. and Canadian stock markets continue to fall, hammering the institution's endowment fund.

Victor Simone, who manages the University of Ottawa's endowment fund, said it counts on a return on investments in bond and equity markets.

The university expects to have at least a 10 per cent loss this year in its endowment, which stood at $142 million at the end of last year.

"Our endowment fund in the first instance is critical in providing financial support for scholarships and financial aid for our students," he said. "If the markets don't allow us to disburse funds on an annual basis, then obviously the number of scholarships also decreases."

The endowment fund is also used to support research chairs at the university. If that funding can't be disbursed, then the university will have to make up the shortfall from its operating budget, Simone said.

Usually, the endowment fund grows by about 10 per cent a year, and about half that growth is disbursed. There are no plans to scale back spending on scholarships this year, but it's too early to tell what next year will bring, Simone said.

"Hopefully, the market can regain some of its losses and hopefully reduce its impact on our scholarships and our research enterprise."

The man who manages the endowment fund at nearby Carleton University said he's optimistic about the situation of his own fund.

Serge Arpin said the endowment is down now, but has been growing at roughly 20 per cent per year for the last five years and is in a good position to weather the downturn in the markets.

"The extreme gyrations and volatility of the last few weeks have started to abate," he said. "We hope they'll continue to abate and that the endowment will continue to grow on a predictable pace."