“Because so much wealth has accumulated in so few institutions, questions arise about the degree to which the inequality in taxpayer subsidies serves a public purpose,” Mark Schneider, a vice president at the American Institutes for Research, said in his prepared testimony.
House Oversight committee chairman Peter Roskam, an Illinois Republican, said he is concerned that college prices are “spiraling out of control” as schools enjoy the tax benefits.
“The level of anxiety that I’m hearing from my constituents in suburban Chicago is palpable and I’m not alone,” Roskam said in an interview Monday. “A lot of people are feeling whipsawed by this.”
Another subcommittee member, Republican Tom Reed of New York, expects to introduce a bill this year that would require endowments with more than $1 billion to spend a fixed percent of investment earnings on financial aid.
College Costs
“I think this is certainly more than reasonable, though it would be better for colleges to adopt such a policy on their own,” according to testimony from Bair, who as president of Washington College, created a policy to freeze tuition. “It saddens me that Congress would need to require colleges to do something so obviously in the best interests of their students.”
Reed said in an interview that using endowments can be a tool to find solutions to bridge the crisis of the “ever-increasing” cost of college.
“The ultimate goal is to bring these prices down,” said Reed, whose daughter recently started college.
Reed said he’s also exploring the issue the “abusive practices” of some donors receiving benefits such as preferential treatment of seats at sports stadiums, when they are already receiving tax benefits for their donations.
This article was provided by Bloomberg News.