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  College Presidents Defend Rising Tuition, but Lawmakers Sound Skeptical
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ContributorArmyDem 
Last EditedArmyDem  Sep 09, 2008 09:18am
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CategoryNews
MediaNewspaper - New York Times
News DateMonday, September 8, 2008 03:00:00 PM UTC0:0
DescriptionBy TAMAR LEWIN
Published: September 8, 2008

Two dozen college presidents and policy experts defended the rising costs of tuition on Monday and argued against forcing colleges to spend more of their endowments.

But Senator Charles E. Grassley, Republican of Iowa, and Representative Peter Welch, Democrat of Vermont, who convened a round-table discussion on the subject, indicated that they would continue their effort to push universities to justify their tax exemptions by spending more of their endowment money.

“Tuition has risen at twice the rate of per capita income,” Mr. Welch said, “and this year it will cost just under $50,000 to attend the average private college. If the cost of milk had risen as fast as the cost of college since 1980, a gallon would be $15.”

Mr. Grassley said it was only fair to ask whether universities were doing enough for society, given that the value of their tax exemption, in the 2007 fiscal year, was more than $17 billion. He cited a survey finding that in that year, universities earned an average return of 17.2 percent on their assets but spent only 4.6 percent.

The two richest universities, Harvard and Yale, together have about $60 billion in endowments.

“If an institution could educate all of its undergraduate students, regardless of need, free of charge, with a payout of just 1 percent of its assets, is its endowment an unreasonable accumulation of taxpayer-subsidized funds?” Mr. Grassley asked.
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