Wesleyan was among 136 of the country’s wealthiest colleges and universities to receive both written and e-mail requests from the Senate Finance Committee to answer 11 sets of questions regarding endowment, financial aid and tuition. The collected data will be used to assess how the University spends its money.
On Jan. 23, The National Association of College and University Business Officers (NACUBO) released a list of 785 colleges and universities that included their 2006 and 2007 endowment figures. The following day, Senators Max Baucus (D-Mont.), chairman of the Committee, and Chuck Grassley (R-Iowa) sent letters to schools with endowments of $500 million or more as of June 2007. They are seeking responses within the next 30 days.
“It’s fair to ask whether a college kid should have to wash dishes in the dining hall to pay his tuition when his college has a billion dollars in the bank,” Grassley said in a press release.
At the top of the NACUBO list is Harvard University, with an endowment of $34.6 billion, followed by Yale University at $22.5 billion. Currently, 76 schools have endowments of over one billion dollars.
The University ranks at number 101, with a 2007 endowment of $710 million. The first liberal arts school on the list is fellow NESCAC member Williams College, ranking at number 33 with a $1.89 billion endowment. Fellow NESCAC schools Amherst College, Tufts University, Middlebury College and Bowdoin College all have larger endowments than Wesleyan.
Although institutions are not required to respond, Vice President for Finance and Administration and Treasurer John Meerts, said that the University will respond to the request.
“Endowment per se doesn’t mean anything…it’s endowment per student that matters,” Meerts said. “[Ours is] significantly less then some of our competitors.”
Meerts explained that, with an endowment of $717 million as of November 2007 and a student population of 3,083, the University has an endowment of $232,565 per student. Amherst, on the other hand, with a $1.66 billion endowment and 1,648 undergraduates, has an endowment of one million dollars per student— $774,716 more than that of Wesleyan.
“The Senate is concerned about top schools…they are not spending enough of their endowments,” Meerts said. “It’s a little unfair that we are being thrown into the same mix.”
Judith Greiman P’10, president of the Connecticut Conference of Independent Colleges, explained that during the 2006 to 2007 school year, private colleges and universities in Connecticut used $409 million of their own money for financial aid.
“Tuition doesn’t cover the full cost of educating a student,” Greiman said.
According to Meerts, a year at the University actually costs $66,000 when factors such as professors’ salaries and utilities are factored in.
One concern of the senators is that institutions with endowments of $1 billion or more tend to spend less, only 4.4 percent of their endowments. The average for other institutions is 4.6 percent.
“Federal law requires most private foundations to pay out five percent of their assets each year toward their charitable purpose,” read the Senators’ press release. “No such requirement exists for university endowments.”
During the 2006 to 2007 fiscal year the University spent 7.4 percent of its endowment, although University policy is to only spend between 4.5 to 5.5 percent of the endowment.
“That is because we need to, to pay the bills,” Meerts said. “I wish I was in [the top schools’] situation. I would have fewer sleepless nights.”
Greiman was surprised by the University’s low position on the NACUBO list compared to peer schools.
“People need to start giving to Wesleyan,” Greiman said. “President Roth has tried to increase the endowment. You want to have a higher endowment to increase financial aid and have long-term financial security.”
According to Meerts, one potential consequence of the Senate’s investigation could be that schools with higher endowments will offer more generous aid packages, making it difficult for other schools to compete.
When asked if he thought the senators had taken this issue too broadly, Meerts quickly responded with a “yes.”
“Not every school is in the same boat,” he said. “I think it’s an opportunity for us to explain how our financial aid, our financial picture relies on the endowment. The endowment is a very important part of Wesleyan’s financial picture.”