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August 05, 2016

Education Group Says Endowments Can Afford More Student Aid

A new report on university investment funds concludes that the wealthiest institutions of higher learning can spend more to assist low-income students, Bloomberg writes.

The study by the nonprofit Education Trust found that nearly half of the 138 colleges whose endowments exceeded $500 million in 2013 rank among the lowest 5 percent of U.S. universities in enrollment of students who get federal Pell Grant aid. Those 67 institutions spent 4.6 percent of their endowments on operations in fiscal year 2012 and 4.9 percent in 2013, according to Education Trust, which also criticized a lack of transparency in colleges’ reporting on their finances.

“They get a significant, significant bonus by not having to pay taxes [on endowments] and by not having a minimum threshold [for annual spending], and the least they can do is provide additional information on their endowment holdings and how their money is spent who it goes to,” said Andrew Howard Nichols.