Yale administrators found themselves asking for a dean’s excuse this week. But instead of needing an extension for a class, the University needed one from the Senate Finance Committee.
More than a month after the committee asked Yale and 135 other top universities to disclose details about how they spend their endowment riches, University officials have not quite finished preparing their response, a Yale spokeswoman said Thursday. The committee — which drew headlines Jan. 24 for what was described by higher education experts as an unprecedented request for information from American universities — had asked for a response within 30 days.
Harvard and Princeton, meanwhile, both responded in the last week to the Finance Committee’s request. Harvard wrote 25 pages; Princeton, 22.
The request from the committee came after months of pressure from parents, alumni and some members of Congress for schools like Yale to tap further into their endowments to help offset the rising cost of tuition and to unshackle their students from hefty debt loads. Leading the charge was the committee’s ranking member, Republican Senator Chuck Grassley of Iowa, who sent jitters throughout the Ivy League this fall when he suggested that Congress force wealthy American universities to spend at least 5 percent of their endowments annually.
Yale will spend about 3.7 percent of its $22.5 billion endowment this year, but that payout will rise to at least 4.5 percent in the next fiscal year under a new spending policy announced in January.
The University expects to send its response to the Finance Committee today or early next week, Yale Spokeswoman Helaine Klasky wrote in an e-mail message Thursday. The delay in responding was a consequence of the wide range of information Yale was asked to gather; as a result, the committee allowed the University an extension, Klasky said.
Yale was not the only school that did not meet the committee’s deadline.
As of Wednesday night, only 43 of the 136 schools had responded to the Finance Committee’s request, said Jill Gerber, a spokeswoman for Grassley.
“That’s okay with us,” Gerber said. “We’ve been flexible about the deadline in the interest of getting thorough responses.”
Among the universities that have already responded, Harvard and Princeton both cautioned the senators against trying to force American research universities to spend their financial reserves more aggressively than they would like, arguing that future generations could suffer as a result.
America’s universities are able to excel because of their historical balance between committing to a high quality of teaching and research and ensuring accessibility to students of all backgrounds, Harvard President Drew Gilpin Faust wrote to the senators.
“This combination of excellence and opportunity,” she said, “has been maintained over decades through a careful balancing of the needs of the current generation of students against the preservation of sufficient resources for generations to come.”
Princeton President Shirley Tilghman made a similar argument. Princeton, she warned, has been able to invest in research and, in turn, improve society “only because of … its careful stewarding of its resources over many years.”
Other schools requested more time to compile their answers, Gerber said, and the committee accommodated them. The request to the schools — sent by Grassley and Finance Committee Chairman Max Baucus, Democrat of Montana — was indeed a large one. The Finance Committee’s letter, which ran to 1,259 words, included 11 questions for the universities to answer.
Among the queries were several that would provide a rare glimpse at how top universities like Yale oversee their wealth. From questions on the size of bonuses given to university officials based on endowment performance to queries about the total spending over the last decade in managing the endowment, the two senators did not hold back.
University President Richard Levin announced in January that Yale would boost its spending from its endowment next year by 40 percent, the result of a new minimum spending rate of 4.5 percent. This year’s 3.7 percent spending rate is among the lowest of its group of peer schools.
The University decided to increase its endowment spending, Levin said at the time, because “it became increasingly clear to us … that we might be shortchanging the present generation.”
Since Grassley floated his idea of mandating endowment spending in the fall — which Yale and other schools said would force them into financial instability — a cadre of top schools, Yale and Harvard among them, have launched ambitious new financial aid initiatives, asserting their desire to help students attend college without incurring serious debt.
Yale drew praise from Grassley after its aid announcement in January, as did Stanford, which announced Feb. 20 that it would eliminate tuition for students whose families earn less than $100,000 annually, and Harvard, which launched a sweeping financial aid initiative in December.
“I hope we’re seeing a trend and a shift in thinking,” Grassley said in a statement last week. “Spending a little more on students won’t break the bank for well-funded schools.”
While Grassley has not yet introduced any legislation that would require colleges to spend a minimum fraction of their endowments annually, it appears that his tussle with America’s wealthiest universities will not draw to a close anytime soon. The responses from the colleges will likely comprise hundreds upon hundreds of pages, and the Finance Committee is expected to spend at least several months compiling and analyzing the documents.
Yale, meanwhile, stands in second place nationally in terms of overall endowment size among American universities. Its $22.5 billion fund — which grew 28 percent last year, the most of any endowment in the nation — trails behind only Harvard’s, which stands at $34.9 billion.