University Endowment Accountability

[Title] An Act to Align University Funding and Financial Accountability

[Preamble] WHEREAS, some universities possess endowments that generate substantial earnings; and WHEREAS, the purpose of government funding is to support educational institutions that need financial assistance; and WHEREAS, ensuring that universities with significant endowment earnings contribute appropriately to their educational programs and student support is essential for economic equity and sustainability;
BE IT ENACTED by the Senate and House of Representatives of [State/Country] in Congress assembled:

Section 1. Short Title This Act may be cited as the “University Financial Responsibility Act”.

Section 2. Definitions For the purposes of this Act:

  1. “Endowment Earnings” refers to all income derived from university endowments during the fiscal year.
  2. “Tuition and Fee Revenue” refers to all income derived from student tuition, fees, and other direct educational charges during the fiscal year.
  3. “Government Funding” includes any federal or state grants, subsidies, or financial aid provided directly to the institution.
  4. “Collateralized Student Loans” refers to loans issued to students for which the university guarantees repayment in the event of default.

Section 3. Funding Eligibility

  1. Any university program where annual tuition and fee revenue is less than the earnings generated from its endowment in the same fiscal year shall be ineligible to receive government funding.
  2. Universities must provide annual financial statements to [appropriate governmental body] detailing endowment earnings and tuition and fee revenue to determine eligibility.

Section 4. Student Loan Requirements

  1. All student loans issued by or through a university where the program’s tuition and fee revenue is less than its endowment earnings must be collateralized by the university itself.
  2. The university must set aside a portion of its endowment earnings equal to the total value of student loans issued annually to guarantee these loans.
  3. In the event of student loan default, the university is required to repay the loan amount in full to the lender using the collateral funds.

Section 5. Disclosure Requirements

  1. Universities must disclose to all prospective and current students whether their programs are ineligible for government funding under this Act and the implications for student tuition and financial aid.

Section 6. Enforcement and Penalties

  1. The [appropriate regulatory body, e.g., Department of Education] shall enforce the provisions of this Act.
  2. Any university found to be in violation of this Act shall be subject to:
  • Fines proportional to the amount of improperly received government funding or issued student loans.
  • Possible suspension of eligibility for future government funding.

Section 7. Effective Date This Act shall take effect at the beginning of the next fiscal year following its passage to allow universities time to adjust their financial and educational strategies accordingly.


This legislation seeks to ensure that universities with substantial endowment earnings use those resources to support their educational missions and relieve the financial burden on students and taxpayers. It also aims to hold universities accountable for their financial decisions and the implications of those on student debt sustainability.

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