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Proposed bill seeks to regulate endowments
Congress to debate increasing the role of federal government in university endowments
Issue date: 10/16/08
A Vermont congressman plans to introduce legislation that would force colleges and universities to spend a minimum amount of their endowments each year.
First-term Democrat Peter Welch said he expects the legislation to require a rolling average over a certain number of years of a minimum five-percent payout from university endowments, about which Hopkins administrators have voiced concerns.
"Creating a one-size-fits-all approach for colleges and universities on how to address college affordability doesn't seem workable,?given how different institutions really are," Director of Student Financial Services Vincent Amoroso said.
Hopkins has the 25th largest endowment of American universities. Welch's proposal was not primarily targeted at rich institutions, according to spokesman Andrew Savage, but comprehensively at the cost of all colleges.
Hopkins has an endowment of $2,800,377,000, according to the National Association of Colleges and University Business Officers, of which all but $61.1 million is restricted.
$198,803,000 is restricted for undergraduate financial aid, according to a letter signed by President William Brody, in response to a letter sent by Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), respectively the Chairman and ranking Republican of the Senate Finance Committee.
The wealthiest 136 colleges and universities in the United States received this letter as part of an effort to learn about the relationships between their endowments and financial aid policies.
"When the issue was initially raised, it was met with a firestorm of opposition," Savage said.
In its response to the motion by Baucus and Grassley, Brody's letter defended Hopkins policies by pointing out that it already spends the amount that Congress was considering mandating.
According to Chief Investment Officer Kathryn Crecelius, approximately five percent of a rolling three-year average of the endowment's market value is spent each year.
First-term Democrat Peter Welch said he expects the legislation to require a rolling average over a certain number of years of a minimum five-percent payout from university endowments, about which Hopkins administrators have voiced concerns.
"Creating a one-size-fits-all approach for colleges and universities on how to address college affordability doesn't seem workable,?given how different institutions really are," Director of Student Financial Services Vincent Amoroso said.
Hopkins has the 25th largest endowment of American universities. Welch's proposal was not primarily targeted at rich institutions, according to spokesman Andrew Savage, but comprehensively at the cost of all colleges.
Hopkins has an endowment of $2,800,377,000, according to the National Association of Colleges and University Business Officers, of which all but $61.1 million is restricted.
$198,803,000 is restricted for undergraduate financial aid, according to a letter signed by President William Brody, in response to a letter sent by Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), respectively the Chairman and ranking Republican of the Senate Finance Committee.
The wealthiest 136 colleges and universities in the United States received this letter as part of an effort to learn about the relationships between their endowments and financial aid policies.
"When the issue was initially raised, it was met with a firestorm of opposition," Savage said.
In its response to the motion by Baucus and Grassley, Brody's letter defended Hopkins policies by pointing out that it already spends the amount that Congress was considering mandating.
According to Chief Investment Officer Kathryn Crecelius, approximately five percent of a rolling three-year average of the endowment's market value is spent each year.
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