Monday, February 11, 2008
The Dallas Morning News reports that the University of Texas Board of Regents voted to increase the amount spent from an $11.7 billion endowment from 4.75% to 5%, or approximately $27 million more dollars next year. This move should allow the UT System to reduce the size of tuition increases. The decision comes amid growing national pressure for wealthy universities to spend more of their endowments. Last year, universities spent an average of 4.6 percent of their endowments. Last month, U.S. Sens. Charles Grassley and Max Baucus sent letters to the 136 colleges and systems with endowments worth at least $500 million, asking why they don't use more of that money to help students afford college. In general, private foundations must make an annual payout toward charitable purposes that meets or exceeds five percent of the market value of its total assets. Some members of Congress and critics say that with soaring tuition and fees and swelling endowment sizes, schools should be paying out at least 5 percent. Many colleges object to spending more than that, saying they need to keep a large pot for future downturns or emergencies.