Washington
In the latest sign of increasing government scrutiny of higher education, the U.S. Senate Finance Committee plans to hold a hearing next month to question whether colleges and universities are abusing their tax-exempt status, a senior committee staff member told The Chronicle in an interview on Thursday.
The hearing, tentatively scheduled for December 5, will examine the rising cost of college tuition and what institutions are doing to curtail it, as well as tax programs designed to assist low-income students. Committee members also plan to highlight problems they see with endowment management, executive compensation, and the increasing commercialization of college sports, the staff member said.
The investigation, which has support from both Democratic and Republican leaders on the committee, follows recent discussions led by the U.S. secretary of education, Margaret Spellings, about requiring more accountability in higher education, as well as an examination by the U.S. House of Representatives Ways and Means Committee into whether college-sports programs deserve their tax exemption.
The Senate Finance Committee plans to explore why tuition rates continue to climb so rapidly, particularly as many college endowments are ballooning and the compensation of college administrators and sports coaches is reaching new highs, according to the staff member, who spoke anonymously because of committee policy.
The committee intends to question whether colleges and universities deserve a tax break if they are not doing much to ensure better access for students from lower- and middle-income families.
The hearings may lead to legislative action next year on the tuition tax credit, which expired this year and was not included in a tax-reform bill, the staff member said.
The inquiry strikes at a growing concern among many Americans about the increasing cost of higher education, said Sheldon E. Steinbach, a Washington lawyer and longtime college advocate, in an interview on Thursday.
But understanding why tuition costs have risen so rapidly is a complex issue, he said, and getting experts to explain it will be a challenge.
Still, he said, the hearing’s timing makes sense. “With all the tax benefits for higher education in the tax code,” he said, lawmakers “have every reason to ask, Are we getting our money’s worth?”
Sen. Charles E. Grassley, the Iowa Republican who is the committee’s chairman until January, plans to call the hearing. Sen. Max S. Baucus, the Montana Democrat who will take over as chairman when Democrats assume control of Congress next year, is also in favor of holding the hearing. He intends to make education a top priority in 2007, according to a staff member.
Democratic support of the hearing could signal the beginning of a broader inquiry into college finances, said Raymond D. Cotton, a lawyer in Washington who specializes in presidential-compensation matters.
“This could be only the opening gun,” Mr. Cotton said.
The committee has yet to determine a list of witnesses, although they will likely include experts from within the academy, including college presidents and association officials, as well as critics of higher education. The committee plans to include perspectives on “best practices” by higher-education institutions to control costs and enhance student access, as well as ideas about how institutions are spending money from their endowments to help students attend college.
Background articles from The Chronicle:
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