House Subcommittee Re-Examines Endowments and Student Aid

The House Ways and Means Oversight Subcommittee held a hearing earlier this month, it’s second in less than a year, examining the largest college and university endowments and how they are being used by those institutions.

Several subcommittee members explored whether luxury amenities at some institutions are paid for by funds that should instead be used for student aid. Most members, and many of the witnesses, described the “skyrocketing” cost of college, and tuition that is “spiraling out of control.” Witnesses from several think tanks helped fuel those perceptions. However, one witness was able to tell a different story.

The subcommittee heard from Jeff Amburgey, Vice President for Finance at Berea College in KY, who described the Berea no-tuition model. Amburgey’s testimony successfully highlighted the diversity of private colleges, without suggesting Berea’s model should be imposed on institutions that aren’t federally recognized work colleges.

Rep. Tom Reed (R-NY) continues to work on legislation that would require mandatory endowment payouts for tuition assistance. He also mentioned the high salaries of fired football coaches at several public universities, as well as the salaries of private college presidents, in his own state.

Several subcommittee members, including Chairman Peter Roskam (R-IL), said college costs are a personal issue, having high school and college age children of his own who must make decisions based on affordability rather than preference.

While the higher education community submitted comments, for the record, on endowments and student aid, all of the good work that most of the colleges with the largest endowments already do for the lowest income students, including fully covering tuition and other educational costs, was never mentioned.

The subcommittee did not discuss the questionnaire it sent out to 56 private colleges earlier this year requesting significant information on endowment uses and restrictions. Much of what was discussed at the hearing – debt, student aid, etc. – would actually fall outside the jurisdiction of the Ways and Means Committee. Other than the Reed draft legislation, which has been in the works for over a year, there are no other legislative efforts aimed at endowments.