• The Senate Finance Committee sent a letter to 136 universities with endowments over $500 million
• The senators hope to see how universities spend its money and give more money to expand financial aid
• The National Association of Colleges and University Business Officers released a list of college endowments and found the highest return rate in investments since 1998
• Marquette ranked 180 on the list, with an endowment of $360 million, a 19.6 percent increase

As college endowments continue to skyrocket and tuition jumps, the U.S. Senate Finance Committee is investigating how colleges spend their endowments.

Last Thursday Senators Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) sent a letter to 136 colleges with endowments of $500 million or more to explore how much of endowment funds are appropriated for financial aid.

Tuition, college presidents' salaries and endowments are all increasing, and the senators said they hope financial aid will rise as well, according to the Finance Committee's press release.

"It's fair to ask whether a college kid should have to wash dishes in the dining hall when his college has a billion dollars in the bank," Grassley said.

The letter was written on the same day the National Association of College and University Business Officers released its annual survey of college endowments, finding an increase of $71 billion from 2006.

Of the 785 universities in the U.S. and Canada studied, there was an 8.6 average 10-year rate of return for endowments, the highest rate of return since 1998, said Jessica Shedd, director of research and policy analysis at NACUBO.

Harvard University ranked No. 1 on the list, with an endowment of $34.6 billion, up from $28.9 billion in 2006.

Marquette's endowment rose 19.6 percent to $360 million, ranking Marquette 180 on the list.

Robust markets and good investment returns have contributed to high endowments, said Richard Vedder, director of The Center for College Affordability and Productivity in Washington, D.C. Generous alumni support has also helped the numbers grow.

The senators included in their letter a recommendation that universities with large endowments contribute 5 percent of endowment funds to financial aid, like charitable organizations are required to do. This would give more aid to middle and lower class families.

Vedder said if Congress did mandate a 5 percent rule, it couldn't force colleges to spend money on financial aid. Because Congress sent a letter and not a subpoena, Vedder said he thought most universities would ignore it.

"This is a powerful group so you ignore them at your own peril," Vedder said. "We'll see what happens."

Robert Rosenberg, associate vice president for public affairs and communications at the University of Chicago, said it plans to complete the letter to better explain how it uses its money. The University of Chicago ranked 13th on NACUBO's list, with $6.2 billion this year.

Most universities could not realistically give away 5 percent of their endowment funds, he said.

"If money weren't there or compromised, we'd have significant increases in tuition," Rosenberg said.

He said, unlike charitable foundations, colleges have operating expenses, which makes the comparison unfair. Also, it's difficult for the University of Chicago to compete for students with universities with large endowments like Harvard, he said.

Schools with big endowments can take more risks and make college almost costless for low-income students, Vedder said.

Harvard and Yale have both introduced new financial aid policies, benefiting middle class families. Families who make above $120,000 and below $180,000 per year only have to pay 10 percent of their income at Harvard, according to its Web site.

Private schools, like Marquette, may want to include these packages, but cannot afford it, Vedder said.

Harvard has endowments going back to the 17th century, with a much larger endowment than Marquette, said the Rev. Robert A. Wild, president of Marquette.

He said universities like Harvard should have had to pay the 5 percent long ago.

"The notion that they hold onto it and spend as little as they do strikes me as really strange," Wild said. "How much money do they need?"

He said he doesn't anticipate smaller schools like Marquette being pressed about giving away money. Marquette spends about $5 million from the endowment for scholarships, he said.

Wild said he sees Marquette's endowment continuing to rise.

"We want to try to manage it conservatively so money doesn't disappear, but we want to see it grow, for scholarships to help students," Wild said.