The University of Michigan fires off a 21 page memo defending it’s spending practices for financial aid in response to a Senate inquiry about university endowments in general. I’m quite curious as to how this will play out on both sides.

University Talking Points:

• We spend 20 percent of our endowment payout towards financial aid
• We increase financial aid at a higher rate than we do tuition
• 80 percent of all Michigan residents attending the U receive financial aid

Congressional Talking Points:

• For institutions with endowments greater than $1 billion, the average payout is 4.6 percent; Michigan’s was 3.75 percent last year.
• If colleges were to increase payouts annually by half a percentage point past the current rate, all tuition increases would be eliminated and the amount of grants would be doubled to undergrad.
• Federal law regulates the endowment spending of most private foundations/non-profits, they do not regulate endowment spending for universities.