Endowments, College Costs Discussed at Grassley/Welch Roundtable

Sen. Charles Grassley (R-Iowa) and Rep. Peter Welch (D-Vt.) held a roundtable discussion on September 8, on rising tuition costs and how college and university endowments help offset those costs. While the discussion took place in the Senate Finance Committee hearing room, it was not an official committee function, and Grassley and Welch were the only congressional participants.

Grassley has been examining these issues for over a year, and, during consideration of the Higher Education Act reauthorization in February, Welch had offered an amendment (later withdrawn) that would have mandated a 5 percent endowment payout for all colleges and universities. Grassley reached out to Welch in the spring, and offered a roundtable discussion as a way for both of them to continue a mutual examination of the issues.

Participants included a cross-section of the higher education community, along with other financial experts. NAICU members participating included Larry Shinn, president of Berea College; Shirley Tilghman, president of Princeton University; and Anthony Marx, president of Amherst College. Faculty members representing Yale University and Grinnell College also presented.

The higher education panelists echoed Grassley's and Welch's concern over rising college costs, and detailed many of the most burdensome cost drivers institutions face. They made clear that a mandatory endowment payout was not the solution to the problem - and that such a mandate could actually harm many institutions. Daniel Fogel, president of the University of Vermont, expressed his own concern about the effect such a proposal would have on small independent colleges and universities.

Grassley made no commitments on future legislation, but did say he prefers self-regulation, and is pleased with what he sees happening with tuition assistance programs at large research institutions. "It's been really rewarding to get people to sit down and think and talk," he observed. "A lot can be corrected without Congress stepping in." He also acknowledged the complexity of crafting payout legislation for so many different types of institutions. Welch, however, appeared to remain skeptical of the self-regulatory approach, and seemed to feel that a bill could be crafted with appropriate flexibility.

The Senate Finance Committee has no plans to take up higher education legislation this year, and neither the House Education Committee nor the Ways and Means Committee is considering anything similar.

For more information, please contact:
Karin Johns