UF endowment draws Senate scrutiny
Published: Tuesday, January 29, 2008 at 6:01 a.m.
Last Modified: Monday, January 28, 2008 at 10:33 p.m.
Following reports that the University of Florida's endowment has grown substantially in the past year, UF and other university officials are facing scrutiny from two U.S. senators who say those dollars should benefit more needy students.
Sens. Max Baucus, D-Montana, and Chuck Grassley, R-Iowa, have sent inquiries to all universities with endowments that exceed $500 million, a category that would include UF with its $1.2 billion endowment.
"We're giving well-funded colleges a chance to describe what they're doing to help students," Grassley said in a news release.
The inquiry comes on the heels of a new report from the National Association of College and Business Officers, which showed endowments had grown by an average of 17.2 percent in the past year - the biggest gains in nearly a decade. UF's endowment grew by 22.4 percent, according to the report.
UF's endowment is theoretically a permanent pot of money, because the university only spends an amount that's expected to be returned on its investments.
The funds in the endowment are restricted, because donors specify where the money will be spent. As such, an increase in the endowment's size doesn't necessarily translate into an increase in the amount of need-based aid offered at UF, explained Leslie Bram, vice president of the UF Foundation.
"It's all donor restricted, and that unfortunately is not what's understood in Washington," said Bram, who added that UF's Foundation would cooperate fully with the inquiry.
About 25 percent of UF's endowment spending is now going toward student aid, Bram said. Other allocations from the endowment go toward endowed professorships that are designed to lure faculty.
UF has made efforts in recent years to fund more need-based scholarship, notably putting millions of dollars into a program for first-generation college students from poor families. Yet, the number of UF students receiving Pell Grants - federal awards typically given to students with family incomes of $40,000 or less - has declined. In 2004, UF hosted 8,021 Pell Grant recipients. That number has dropped every year since then, and fell to 7,555 - a 5.8 percent decline from 2004 - in 2007.
Overall, the aid awarded to UF students is predominantly merit-based, and has nothing to do with financial need. That is also the case across the state of Florida, where the merit-based Bright Futures program functions as the state's largest scholarship source. Florida ranks 42nd in the nation in the proportion of financial aid awarded to need-based students, according to recent data compiled by the state Board of Governors.
At UF, about 76 percent of all aid awarded in 2006-2007 was based on merit - not financial need, according to UF's Office of Institutional Research.
The total aid given to UF students is drawn from various sources other than the university's endowment, including federal and state revenues. But if the scholarship money drawn from the endowment and other institutional resources is viewed in isolation, it's clear most of UF's own money also goes toward students based on merit, and not financial need. In 2006-2007, 65 percent of UF's institutional aid dollars - drawn from the endowment, alumni and other internal sources - went to non-need-based aid, according to UF's figures.
UF President Bernie Machen has made efforts during his tenure to bolster need-based programs, adding several million dollars to the Florida Opportunity Scholars program in the past several years. The program awards scholarships equivalent to the estimated annual cost of attendance - $16,000 - to first-generation college students whose families make less than $40,000 a year. UF has given these awards to more than 800 students, and about 400 more are expected in the fall.
The senators' letter was sent to all universities with endowments that exceed $500 million, which in Florida would only include UF and Florida State University. All the institutions have 30 days to comply, and both UF and FSU officials said they would.
Jack Stripling can be reached at 352-374-5064 or Jack.Stripling@gvillesun.com.
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