PROVIDENCE, R.I. [Brown University] — Brown University submitted a detailed overview to members of the U.S. Senate and House of Representatives on April 1 on how the University manages its endowment funds to advance and sustain a world-class teaching and research institution and to ensure that a Brown education is both accessible and affordable for the diverse students it serves.
The University offered the information to members of the Senate Committee on Finance and the House Committee on Ways and Means in response to a Feb. 8 request that asked Brown and 55 other private universities to share details and policies by April 1 to help the committees understand “how colleges and universities are using endowment assets to fulfill their charitable and educational purposes.” The inquiry consisted of 13 questions on endowment holdings, management, and spending, fundraising protocols, and governance as it relates to financial stewardship, as well as resources devoted to financial aid. Brown has made its complete response available online.
In a letter introducing the University’s response, Brown President Christina Paxson stated that Brown is committed to ensuring that “the excellent education the institution provides is accessible and affordable.”
“Brown takes very seriously its responsibility to manage the University’s endowment to meet the highest standards of excellence for the current generation of students, while simultaneously safeguarding our financial capacity to sustain and build those standards for generations of students to come,” Paxson wrote.
Brown’s letter highlights the University’s efforts to meet the full demonstrated financial need of its students, as well as Brown’s commitment to looking beyond tuition in calculating support for the true cost of attending college, including tuition, fees, room, board, books and personal expenses.
Undergraduate financial aid has been the fastest growing area of the University’s budget for more than 25 years, with the recently approved budget for next year set at $120.5 million. Brown’s investment in supporting students has steadily increased since the economic crisis of 2008, despite the economy’s volatility, and the endowment has played a major role in Brown’s capacity to build financial aid.
The response to Congress notes that, for the current 2015-16 academic year, the average grant award for students receiving financial aid is $41,438, which covers 63 percent of the total cost to attend Brown. In contrast, in 2008, the average grant award was $23,787, which covered just 49 percent of the cost.
The University’s response also points out how Brown’s ability to provide generous financial aid packages contributes to the diversity of the student body. Families with a total income below $60,000 and assets less than $100,000 pay no parental contribution, and the loan component of their award is replaced with additional scholarship.
As a result, 1,635 low-income students comprise approximately 25 percent of enrolled undergraduates, who come from the full range of racial, ethnic and socioeconomic groups — 61 percent from racial or ethnic minority groups, 45 percent are first-generation college students, and 60 percent are Pell Grant recipients.
When it comes to college debt, a major element of the national discussion about higher education, less than 35 percent of graduating seniors among Brown’s Class of 2014 borrowed while attending, compared to a national average of 71 percent. The average loan debt among those who did take out loans was significantly below average — $23,967 for the Class of 2015 compared to the national average of $33,000.
The Brown endowment plays a critical role in providing financial aid, the University’s reply notes. Distributions from the endowment contributed $38 million to fund financial aid in 2016, which is 34 percent of the aid budget. “This support is made possible by policies focused on preserving and prudently growing the endowment and its income distribution in perpetuity,” Paxson wrote.
The University’s response to Congress also detailed other vital priorities that the endowment supports — the faculty expertise, academic programs and research resources that allow Brown students to engage in the learning, research and discovery of an institution that is addressing challenges of vital importance to the world, from the urgent health needs of children and economic uncertainty, to global security, environmental change and poverty.
Brown’s response highlights the University’s impact beyond campus as a leading research institution that boosts economic development in Rhode Island and the greater region. Well beyond the voluntary payments and property taxes totaling $81.5 million over 20 years detailed in the response, Brown is able to serve as a catalyst for growth in large part due to careful management of its endowed funds with a focus on long-term viability.
“Careful stewardship of the endowment enables Brown to meets its obligations to financially support the University’s faculty, student body and academic infrastructure for all of these initiatives over the long term,” Paxson said.
The information from Brown was submitted to the offices of Sen. Orrin Hatch, chairman of the Senate Committee on Finance; Rep. Kevin Brady, chairman of the House Committee on Ways and Means; and Rep. Peter Roskam, chairman of the House Committee on Ways and Means Oversight Committee.