UM system responds to endowment inquiry

The U.S. Senate Committee on Finance requested information from 136 colleges and universities in January.

By Elliot Njus

Published Feb. 29, 2008

The UM system answered a U.S. Senate inquiry into its endowment today, according to a system news release.

The inquiry includes the UM system and 135 other college and universities with an endowment of more than $1 billion. The UM system has an endowment approaching $1.1 billion, according to a National Association of College and University Business Officers study.

Senate finance committee leaders Sen. Max Baucus, D-Mont., and Sen. Chuck Grassley, R-Iowa, sent a letter Jan. 24 to the system requesting information about the system's finances and financial aid. The letter requested a response within 30 days.

In an accompanying news release, the senators expressed concern about the rising cost of education and the availability of student aid at a time when most universities are reporting "explosive" endowment growth.

The UM system didn't meet the deadline, but a letter from UM system President Gary Forsee submitted with the response said the inquiry was addressed to MU Chancellor Brady Deaton and then forwarded to the system.

In the letter, Forsee said the university aims to keep costs low, but that the university faces smaller state contributions to operating costs.

"Public institutions like the University of Missouri grapple daily with the question of how to maintain that low price in the face of an uncertain and insecure revenue base," he said.

The university provided enrollment, tuition and financial aid figures. The response explains university policies regarding the endowment.

In the letter to 136 universities, the Finance Committee members said that although most private foundations must pay out 5 percent of their endowment each year, there is no such requirement for universities.

In a previous Maneater report, Nikki Krawitz, UM system vice president for finance and administration, said such a requirement on universities would be ill advised. She said the UM system has its own system to control endowment payout, in which the university only spends between 96 and 106 percent of the previous year's spending.

The full document is available at http://www.umsystem.edu/ums/president/access/.