The UT System said it will not answer students' questions about its endowment spending before it finishes responding to a federal government questionnaire.
Sens. Chuck Grassley, R-Iowa, and Max Baucus, D-Mont., sent letters to 136 U.S. colleges with endowments of at least $500 million. The senators requested information detailing each university's use of its endowment for student financial aid. The UT System, which holds the fifth-largest endowment in the nation, has yet to complete its response.
Endowments consist of money, property or other assets donated to an institution that must be invested to appreciate over time for the university's well-being. The UT System's endowment assets total $15.6 billion.
In a conference call with The Daily Texan, Grassley said he hopes students will ask their university administration or board of trustees about their university's endowment usage.
"I just want colleges to be aware of the fact that the purposes of college are teaching, educating and research and that the money ought to be used for that purpose," Grassley said. "A college endowment should not be a storehouse of funds."
He said nothing will highlight the importance of this issue more than students and their families raising questions about how schools are using their endowments.
UT System spokesperson Matt Flores said answering questions regarding the endowment is a matter of protocol and that the UT System needs to answer to the federal government first.
About 83.5 percent of UT's endowment is restricted by the state constitution, according to a UT System report. Only 2 percent of the remaining non-state designated funds do not have restrictions placed on them from donors. This leaves less than 1 percent of the total endowment available for student financial aid.
Anthony de Bruyn, another UT System spokesperson, said these restrictions by the Texas Constitution and donors make UT's endowments uniquely complex.
"I think that you've got to realize that endowments have a lot of flexibility, even though there is a lot of designated giving,"
Grassley said. "Even though 99 percent might be [restricted], even if you take 1 percent of your endowment, that's still a lot of money, I'll bet, and don't forget that probably a lot of that 99 percent was donated for student aid, as well."
According to the report, the Texas Constitution mandates that portions of the endowment apply toward several things, including construction and research. Flores could not disclose the other initiatives that the non-designated part of the endowment funds. Initiatives such as attracting and retaining faculty, which University President William Powers noted in his September State of the University address, are not shown to have designated funds in this study, either.
Grassley said questioning decision makers is part of the democratic process at any level.
"Just like Congress is not going to be responsible if our constituents don't watch over us, university trustees, administration may not be responsible if you don't look over them," he said.
Grassley said he was optimistic that the Senate inquiry into endowment spending will lead universities to "self-correct" so that legislation will not be necessary.
Several universities topping the largest endowments list have made changes to their financial aid programs. Universities such as Harvard, Columbia and Stanford have adopted policies waiving tuition for students whose parents do not earn a mini-mum income.
© 2008 Daily Texan via U-WIRE