Senate Looking at Endowments as Tuition Rises

The New York Times reports:

The Senate Finance Committee, increasingly concerned about the rising cost of higher education, demanded detailed information on Thursday from the nation’s 136 wealthiest colleges and universities on how they raised tuition over the last decade, gave out financial aid and managed and spent their endowments.

The committee also asked about endowment-related bonuses paid to college presidents and endowment managers.

The move came as a record 76 colleges and universities achieved endowments of $1 billion or more in the last fiscal year, according to a report released this week. Harvard’s endowment, the largest, grew 20 percent, to $34.6 billion, while Yale’s, the second largest, grew 25 percent, to $22.5 billion.

“Tuition has gone up, college presidents’ salaries have gone up, and endowments continue to go up and up,” said Senator Charles E. Grassley of Iowa, the ranking Republican on the committee. “We need to start seeing tuition relief for families go up just as fast.”

The committee, which has a central role in setting tax policy, has been pressuring universities to use more of their wealth for financial aid and threatening to require them to spend a minimum of 5 percent of their endowments each year, as foundations must. The committee pointed out that donations to universities and their endowment earnings were both tax-exempt.

Seeking to head off Congressional action, wealthy universities have been rushing in recent months to expand financial aid, in some cases using more of their endowments to increase assistance to low-income and upper-income students alike. Harvard recently said it would increase aid for families earning up to $180,000 a year, and Yale said it would help families with annual incomes of as much as $200,000.

The request for information came in a letter, signed by Mr. Grassley and the committee chairman, Senator Max Baucus, Democrat of Montana. It provided a strong indication that the committee was not backing off the idea of requiring colleges to spend more of their endowments.

America's homegrown Marxist universities don't like paying taxes or helping students out.But,they sure like increases in the Department of Education budget.Note to the comrades at the major universities: did you think having an all Democratic party faculty hiring system wouldn't make enemies in the long run?