The UT System responded Friday to a questionnaire from the federal government regarding the uses of its endowment.
In January, Sen. Chuck Grassley, R-Iowa, and Sen. Max Baucus, D-Mont., of the Senate Finance Committee sent a letter out to 136 U.S. colleges and universities with endowments of $500 million or more. Institutions were asked to detail their endowment spending and student financial aid policies in the letter.
Grassley told the Texan in March that he hoped the questionnaire would make universities "self-correct" their endowment spending, so that the federal government will not have to mandate spending.
"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," he said. "A college endowment should not be a storehouse of funds."
Endowments are money, property or other assets donated to an institution that must be invested to grow over time for the university's well-being.
The UT System has the largest public-school endowment in the nation and fifth largest overall, totaling more than $15 billion, according to a December study released by the National Association of College and University Business Officers. Harvard and Stanford universities have also increased their endowment spending. Because of its endowments, students at Brown University will not have to pay tuition if their parents make less than $60,000 a year.
UT's endowments are more complex than other universities, said Anthony de Bruyn, director of UT System public affairs. The state constitution and donor designations restrict nearly 99 percent of the UT System endowment funds.
Three funds make up the UT System's endowment. The largest is the Permanent University Fund, which consists of more than $7 billion in monetary investments and land holdings in West Texas given to the system by the state of Texas. The $890 million Permanent Health Fund and $5.6 billion Long Term Fund make up the other two funds.
The UT System Board of Regents increased the distribution of the Permanent University Fund from 4.75 percent to 5 percent in February.
"That increase was not in response to the questionnaire," UT spokesman Matt Flores said. "That was something that was already in the works."
The UT System launched a Web site in March to help inform students and parents about paying for college. The site includes campus proposals for tuition and fees and financial aid information at UT System institutions for the next two academic years.
This site was included in a response to one of the questions in the letter regarding how UT handles student financial aid.
"In recent years, institutional aid has grown in importance and is now a major source of financial aid at UT System institutions," UT's response states. "Each UT System institution has established a financial aid guarantee policy that reflects a commitment to cover the full cost of tuition and fees through grant aid for students whose family income falls below a certain threshold."
For most UT institutions, if a family income totals less than $25,000 a year, financial aid will pay the student's tuition. For UT-Austin, this minimum income is $40,000. Students whose family incomes range from $40,000 to $80,000 can receive partial financial assistance.
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