Leveling the Playing Field on Endowments
Elite institutions are under pressure to spend more of their endowments to help low-income students.
BY CHARLES DERVARICS
To improve college affordability for low-income students, some lawmakers and education researchers are beginning to ask the question: Why don’t elite colleges spend more of their endowments on need-based financial aid?
From the halls of Congress to Ivy League institutions, the size and practices of college endowments are generating new interest. The powerful Senate Finance Committee is “likely” to examine college endowments this year, a committee aide told Diverse. A chief concern is transparency: While charitable foundations must spend 5 percent of their assets each year, the rule does not apply to college endowments. As a result, it’s not clear how some elite colleges use their endowments to help needy students.
Overall, 20 elite universities account for almost half of all university endowment funds, says the Congressional Budget Office.
