The Senate Finance Committee launched an effort to probe the endowments of 136 of the wealthiest colleges and universities. Faced with rising college tuition costs and a crunch in student loans, many have raised questions about the financial aid responsibilities of universities with large and growing endowments.
Francis Campanella, professor of finance in the Carroll School of Management, discussed the traditional role of the endowment.
"A true endowment is money that a college accepts from a donor and promises never to spend. They would just spend the return on the money," Campanella said.
"Basically, [endowments] are used for financing student financial aid, faculty salaries, faculty that may hold endowed chairs, and operating expenses."
He said that some universities, such as Yale and Harvard, can afford to put a percentage of their endowment return toward financial aid.
In the past year, Harvard has made revolutionary reforms to their financial aid program. The University was able to make these changes because of the size and unprecedented growth in the size of their endowment funds.
"It definitely does [make a difference in financial aid] for the institutions with large endowments," Campanella said."The Senate Finance Committee hasn't done anything yet, and it seems unlikely that they would."
He said that a select and very limited number of universities would be able to take a percentage of the return from their endowments to make the sort of sweeping and unprecedented aid reforms that Harvard made.
BC's endowment currently stands at around $1.75 billion, and ranked at 41st among universities in a 2007 study of the National Association of Colleges and University Business Offices (NACUBO).
The top five school endowments in that same study were held by Harvard University, Yale University, Stanford University, Princeton University, and the University of Texas System. They all had endowments between $15 billion and $35 billion.
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