University endowments: billions and billions served
Parents have paid tuition bills which have risen faster than the rate of inflation for many years. This at the same time that 76 of the wealthiest schools have amassed endowments in excess of $1 billion. Harvard have $35 billion salted away, Yale $22.5 billion and the University of Minnesota has a $3 billion endowment. This has attracted the attention of Iowa senator Charles Grassley. He is looking at the gains in college endowments in recent years and asking why tuition costs are rising. His request:
“This isn’t just an issue of college access. It’s also an issue of tax fairness. Universities hold at least $340 billion in endowments. The donations to those endowments and the endowments themselves are all tax-exempt. American taxpayers are subsidizing that tax-exemption, and they deserve public benefit in return. Meanwhile, I hope Congress is motivated by Harvard and Yale’s action to continue a discussion of whether to impose a mandatory endowment pay-out requirement on well-funded colleges. Colleges are tax-exempt, and other tax-exempt entities, such as most private foundations, have a mandatory pay-out requirement of 5 percent a year. It’s reasonable to consider a mandatory endowment pay-out requirement for colleges.”
Minnesota Public Radio hosted a fascinating debate about this issue between an administrator from the University of Minnesota and a past-chancellor of the University of Wisconsin who argue the university case for ever-larger endowments (their main claim being the need for ‘inter-generational’ savings for the future and honoring donors rights to link their gifts to specific programs.)
The opposing viewpoint is championed by Steven Roy Goodman, an educational consultant and admissions strategist. He is the author of College Admissions Together: It Takes A Family
The callers to the program include a Twin Cities resident planning to move out of state in search of affordable education; a donor who wants to tie his grant to the school to a specific purpose and others.
The program lasts an hour. Well worth listening to.
