Georgetown was among the 137 colleges to receive a letter last week from Senator Charles Grassley (R – Iowa) asking for more information about their financial aid and endowment spending. Grassley, ranking member of the Senate Finance Committee, wants to use their repsonses to gain support for a bill requiring universities to spend a certain portion of their funds annually.
We at Georgetown are accustomed to peer pressure from our neighbors on the U.S. News & World Report rankings. The heat has intensified recently when Harvard, Yale, Stanford and Princeton’s announced plans to significantly increase financial aid offered to students. In this major financial aid upheaval, Harvard will require families with incomes ranging from $120,000 to $180,000 to pay only 10 percent of their income. This initiative expands on one taken in 2006, when Harvard raised the maximum income eligible for free tuition from $45,000 to $60,000.
Sen. Grassley and his supporters applauded the universities’ decisions, claiming that all institutions with endowments of $1 billion or more should do the same.
Eliminating student loans is a noble idea for institutions that have endowments like Harvard’s $30 billion, but having only crossed the $1 billion mark last year, our endowment is paltry in comparison. It is unreasonable of Grassley to expect that Georgetown compete in the same field of financial aid incentives as the wealthy giants.
According to David Kirkpatrick, Senior Education Fellow at the U.S. Freedom Foundation, Harvard could completely eliminate its tuition without operating at a loss—the $300 million it would cost annually to fund every student’s education doesn’t compare to the monthly $700 million the school makes from its endowment’s earnings. Georgetown, with the 76th largest endowment in the nation, does not have such a luxury.
It’s comforting to know that our Congressional representatives don’t want to make any legislative decision without first consulting the institutions that would be affected first. Scott Fleming, University Assistant to the President for Federal Relations, said it’s “encouraging” that Grassley has asked universities before he and other members of the Senate Finance Committee act.
“I would hope that the information request would lead them to see the wisdom of possibly not treating us the same as Harvard or Yale,” Fleming said.
Despite Grassley’s consideration, it’s unfortunate that hard-working members of our University must find the time to compile and send back to Congress the information to prove that, while $1 billion may seem like a hefty chunk of change, Georgetown students shouldn’t dream of loan elimination anytime soon. For now, let’s celebrate the fact that our endowment increased by 24 percent in fiscal year 2007 and continue to focus on growth.
