Saturday, March 1, 2008
The Grand Rapids Press reports that the University of Michigan has issued a 21-page response to inquiries about the University's use of its $7.1 billiion endowment, the eighth largest in the country. The response highlighted the $40 million decrease in state appropriations since 2002, $117 million in recent cost cuts, and the $47 million spent from the endowment last year for scholarships and fellowships.
The inquiries came in the form of a letter from Senators Max Baucus and Chuck Grassley, the Chairman and Ranking Member, respectively, of the Senate Finance Committee as part of broader investigation into how colleges and universities are using their growing endowments. According to a January 24, 2008 press release from the Senators, available on the Senate Finance Committe website, they sent identical letters to the 136 colleges and universities with endowments of $500 million or more. The letters asked for a response within 30 days, but the University of Michigan appears to be the first institution to publicly release its response.
According to a report in Crain's Detroit Business, the University provided details of its response in a press briefing by Associate Vice President for Finance Peggy Norgren. She noted that spending of the endowment is limited both by donor restrictions and by the yield on the endowment, and that 62 percent of University of Michigan undergraduate stuents already receive some amount of financial aid.