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January 31, 2008

Editorial: Congress Should Use Care Before Changing Endowment Rules

An editorial column in The Boston Globe cautions Congressional leaders to examine how higher-education endowments are currently used before pushing universities to spend 5 percent.

The article notes that in 2007, colleges and universities already spent an average of 4.6 percent of their endowments, and endowments give institutions freedom to pursue research and other projects without waiting for government money.

While sharp increases in tuition are troubling, “Congress also needs to recognize that professors, libraries, and labs are inherently expensive and that universities produce significant public benefits, in the form of research grants, economic development, and the new blood they bring into their host communities. If lawmakers want to tighten the rules for endowments, they first need to offer better evidence that schools are abusing their tax-free status and acting against the public interest.”

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