Universities Pushed to Spend Endowments on Tuition Aid

Federal lawmakers met with 24 college presidents on Monday to push colleges and universities to justify their tax exemptions by spending more of their endowments on tuition assistance for needy students, reports The New York Times.

Sen. Charles E. Grassley, Republican of Iowa, pointed out that tax exemptions for universities in the 2007 fiscal year amounted to more than $17-billion — which, he said, leads him to question whether universities were doing enough for society. He cited a survey finding that showed that in 2007, universities spent only 4.6 percent of their assets but earned an average return of 17.2 percent.

Although Mr. Grassley has suggested in the past that the wealthiest universities spend 5 percent of their endowments each year, as private foundations are currently required to do, he stopped short of saying he was planning any specific legislation on the topic.

Instead he thanked those colleges that have already increased the amount they spend on student aid, reports The Chronicle of Higher Education, and offered a suggestion: “I would like to encourage you folks to look inward and see what could be self-corrected, and that would make everyone’s job a lot easier.”

Read The Chronicle of Philanthropy’s most recent survey of endowment assets. Also see a look at questions members of Congress are raising about all wealthy nonprofit institutions.

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