Cornell President David J. Skorton's response to a U.S. Senate Finance Committee's request for information on endowment growth and spending for student aid this month included a cover letter and a highly detailed 25-page financial report (available at http://www.cornell.edu/president/).

Skorton's reply was the first to the reach the offices of Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.), leaders of the finance committee who issued the requests in January to 136 U.S. colleges and universities with endowments of $500 million or more.

The committee posed 11 questions largely generated out of concern that college tuitions are rising faster than inflation and low- and middle- income families are getting left behind while elite universities run up historic endowment figures.

The Cornell report answered a range of questions that included: the sticker price of tuition and the average and median prices students have paid for the past 10 years; methods and expenditures to recruit low-income students; annual growth of endowments; investment returns and fees paid to endowment managers; and even compensations, if any, to university presidents.

Cornell's endowment is currently valued at $5.4 billion, and the university is in the middle of a $4 billion fundraising campaign and seeks to increase its endowment by $1.3 billion.

Skorton's letter explains that the university, over a two-year period, is eliminating need-based loans for all undergraduates from families with incomes under $75,000 beginning in academic year 2008-09, "making it possible for new students to graduate debt-free." Cornell also is capping annual loans at $3,000 for students from families with incomes between $75,000 and $120,000.

"This $24 million initiative," the president writes, "will be funded from new endowment gifts, an increase in endowment payout and a reallocation of existing resources.

"Cornell is able to offer financial aid packages like [this] ... because of sound management of endowment assets and the willingness of its Board of Trustees to make necessary adjustments to ensure that university assets are used effectively."

The trustees "discharge their duties with great care," Skorton stated, "all in an environment of intense federal, state and public scrutiny."

While the Senate Finance Committee's concerns about endowment growth and rising tuitions are reasonable, the idea that universities can remedy the situation by simply tapping into endowments for financial aid "will not solve the matter in the long run or even the short run," said Carolyn Ainslie, Cornell vice president for planning and budget.

"It's clear that a lot of people do not understand the economic structure of higher education," said Ainslie. "We have to do a better job of explaining where these funds come from and our external obligations, which include state regulations, trust law, and rules and requirements for federal grants and contracts, among many funding sources."

She added that the university also needs to show how these sources finance educational programs.

That said, Cornell has a tradition of transparency regarding its financial activities. Many of the answers to the committee's questions were matters of public domain, long available to anyone with access to the Cornell Web site. The university also shares this information with students, prospective students, their families, other members of the Cornell community and the public.

Even so, turning such a financial report around swiftly for the Senate committee demanded three weeks of fast work by many Cornell offices. Ainslie extended kudos to all involved, including Michael Whalen, director of planning information and policy analysis, who developed the 25-page report in short order.

"It is a lot of complex information to communicate to an audience that doesn't really understand how we operate," said Ainslie. "For instance, all of the responses had to take into account that Cornell, as a private university with a public mission, has three undergraduate tuition rates and that the state provides subsidies for some of our students from New York state."

One concern among university administrators across the country is that the Senate request marks the beginning of further inquiries that could lead to legislation calling for mandatory payouts from endowments. However, Ainslie said she doesn't see that happening in the immediate future, although the issue will continue to be addressed and discussed in "Washington, in the media and, of course, in academia."