Feb. 28, 2008
UI responds to U.S. Senate questions on endowment, financial aid
University of Iowa President Sally Mason last week sent a letter to the U.S. Senate Finance Committee with an attached report detailing the UI's tuition, financial aid and endowment policies and history.
The letter and report were in response to a request from the Senate Finance Committee, chaired by Montana Democrat Sen. Max Baucus. Sen. Charles Grassley of Iowa is the committee' ranking Republican. The committee's request also went to 135 other universities across the nation with endowments of $500 million or more.
Senator Grassley has been querying colleges and universities across the country about the extent to which their endowments are used for tuition relief and financial aid for students. He has been encouraging a standard 5 percent payout of endowment funds.
Mason made these points in her cover letter to the Senate committee:
--The payout policies for the UI and UI Foundation endowments have always been five percent, with these distributions dedicated directly to donor-designated university support, including scholarships.
--The UI has had the lowest resident undergraduate tuition rates in the Big Ten for many years.
--The UI devotes a significant portion of its total tuition revenue -- nearly 19 percent this academic year -- to student financial aid.
As a result, Mason said, nearly 40 percent of UI students graduate without any debt; average debt for graduating UI students (about $22,000 for the 2006-07 academic year) is below that for students attending other Iowa colleges and universities; and UI students have a loan default rate of less than 2 percent.
"I will be working with the UI Foundation to ensure our efforts to raise private funds continue to put great emphasis on student scholarships and fellowships," the UI President added.
The report provides a detailed picture of the UI's financial aid policy, history of tuition increases, and endowment, including investment and payout policies, as well as showing how the endowment has grown over time. In particular, the report indicates that total tuition assistance for undergraduates has grown from $14 million in 1997-98 to nearly $36 million in 2006-07.
In addition to providing significant student financial aid, UI and UI Foundation endowment distributions also support research, faculty, and a variety of UI programs -- all in accordance with donor-designated purposes. Ninety-eight percent of all private gifts to the UI and UI Foundation are directed to a specific purpose.
Endowed funds at the UI and the UI Foundation are managed and invested to preserve and increase the value of the original gift amount. Each year, five percent of the endowment value is spent on the fund's intended purpose. As the fund grows over time, so can the amount distributed from it annually.
To view Mason's letter, see http://news-releases.uiowa.edu/2008/february/Sally%20Mason%20Cover%20Letter.pdf.
To view the university's response to the Senate Finance Committee, see http://news-releases.uiowa.edu/2008/february/Grassley%20-%20Response.pdf.
STORY SOURCE: University Relations, 101 Jessup Hall, Iowa City, Iowa 52242-1000
MEDIA CONTACT: Steve Parrott, University Relations, 319-335-0552 (office), 319-530-6972 (cell), firstname.lastname@example.org