Penn will comply with requests for information about endowment growth and financial-aid spending asked for in a letter from the U.S. Senate Finance Committee early this week.
The letter, written by committee chairman Max Baucus, Democrat of Montana, and ranking Republican Chuck Grassley of Iowa, seeks to gather data in order to assess how colleges are making education more affordable and how tax breaks for endowments factor into financial-aid policy.
"Tuition has gone up, college presidents' salaries have gone up, and endowments continue to go up and up," Grassley said in a press release. "We need to start seeing tuition relief for families go up just as fast."
Penn received the letter with the other 135 U.S. universities with endowments of more than $500 million. Penn currently has the ninth-largest endowment in the country at $6.63 billion.
The colleges have 30 days from the time the letter was received to respond.
"We're happy to answer the senators' questions," Penn Executive Vice President Craig Carnaroli wrote in an e-mail. "We believe when they really delve into this issue and understand how endowments work, they'll find that universities are using their endowment funds appropriately."
The Senators also wrote in the letter that they would use the information to assess whether Congress should draft legislation requiring universities to spend a minimum percentage of their endowments.
Legislation requiring colleges to spend at least 5 percent of their endowments annually was considered last year but ultimately did not appear before the Senate Finance Committee.
Penn opposed that policy when Congress was considering it, and Carnaroli wrote that "some of the questions being asked make it clear to us that higher education needs to do a better job of explaining to lawmakers how college finances work."
He added, "For example, asking colleges how the endowment payout 'meets the needs of the current student body' fails to recognize that endowments are managed for the long-term and are set up to provide funds for future generations."
Bill Andresen, head of Penn's office in Washington, said he does not think colleges have figured out the answers to the letter's questions yet because some of the information the committee is asking for is complex and requires long-term data.
Data asked for include the mean and median tuition prices and endowment payouts over the last 10 years, how the endowment is managed and how much of the endowment is subject to spending restrictions or limitations.
"It's fair to ask whether a college kid should have to wash dishes in the dining hall to pay his tuition when his college has a billion dollars in the bank," Grassley said in the press release. "We're giving well-funded colleges a chance to describe what they're doing to help students."
