Congress asked colleges with endowments of more than $500 million, including Boston University, to disclose their financial information last month, as a movement in the Senate to increase college affordability gains support.
Senate Finance Committee Chairman Sen. Max Baucus and ranking member Sen. Chuck Grassley have requested endowment information from the 136 wealthiest colleges in the nation in order to create guidelines for a possible plan to require schools to offer financial aid and grants to reduce the burden of college costs on students.
Last month, the committee sent requests to all schools with endowments of more than $500 million. The National Association of College and University Business Officers released its annual report of college endowments Jan. 24, which found universities experienced unparalleled endowment growth in recent years.
“I think it is unprecedented that this many schools have such large endowments,” said Senate Finance Committee spokeswoman Jill Gerber. “We are seeing a lot of endowment growth, a lot of tuition increases and a lot of president’s salaries of universities going up and still a lot of families struggling to afford college.”
Gerber said the review could lead to a government-enforced requirement for financial aid allocation, but said because senators are still in an “information gathering” stage, no official plans have been set.
“Congress and universities should take a hard look at what could be done to improve aid and whether these endowment sizes could play a greater role,” she said.
The committee has discussed creating rules for universities and colleges that are similar to the tax requirements for some other private institutions, requiring them to pay 5 percent of their assets annually to a charitable organization, Gerber said.
She said the Internal Revenue Code allows universities to receive tax breaks that prevent the government from demanding a set amount of money to go toward grants and student aid.
Senators would install the hypothetical payout plan for universities whose endowments are at or above $500 million, Gerber said. The plan rules might not be tailored to each university, but a general requirement could pose a problem for universities with large endowments and large student bodies, she said.
The Senate Finance Committee’s recent interest in college endowments and affordability has spurred schools to increase aid for incoming students and ensure affordability for lower-income and middle-class families.
Harvard created an initiative to eliminate tuition payments for families earning less than $60,000 a year. Yale University, Dartmouth College and Stanford University proposed similar initiatives.
Harvard, which posts the nation’s largest endowment at $34.6 billion, has complied with the Senate Finance Committee’s request for information, but university spokesman John Longbreak said in an email government-enforced aid requirements for students are not a good idea.
“It does not allow for flexibility to protect steady and stable programs in times of market turbulence and, over time, will distort these programs,” he said.
Boston University ranked 69th in the endowment study with a 2007 fiscal year endowment of $1.1 billion, a 20 percent increase from the 2006 fiscal year.
BU spokesman Colin Riley said the university’s endowment could not be compared those of other schools with relatively fewer students.
“[BU] has a modest endowment for a school of its size,” he said. “BU is a tuition dependent school. Tuition pays about half of our $1.5 billion budget.”