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Those with endowments of $25 million to $500 million had negative returns, and those with endowments under $25 million had a return of 0.3 percent.
But Mr. Grassley questioned why other colleges with endowments of more than $1 billion had not followed suit.
Legislators agreed, and subsequently amended the Higher Education Incentive Funding Act of 1999 to exclude institutions with endowments of more than $1 billion.
In January, the Senate Finance Committee requested detailed endowment and spending data from 136 colleges and universities with endowments of at least $500 million.
An article on Monday about growth in college endowments last year referred imprecisely to the relative investment performance of colleges with endowments of $500 million to $1 billion.
The senators moved a day after the National Association of College and University Business Officers released its annual endowment study, which showed that the 76 colleges and universities with endowments of $1 billion or more had seen their value rise 21percentt over the previous year.
In the last fiscal year, Wellesley's endowment, the nation's 32nd largest, generated a 22.7percentt return, better than the 21.3percentt average for universities with endowments of $1 billion or more, according to data compiled by the National Association of College and University Business Officers.
When Jeff Flake, a Senator from Arizona, tried to cut off funding last year, he pointed out that most NSF grants in political science went to universities with endowments of $1 billion or more.
Lawmakers have proposed requiring that about 90 colleges with endowments of $1 billion or more spend about 25percentt of their annual earnings for tuition assistance — or forfeit their tax exemptions.
They have no single magic strategy, but rather a series of approaches — as shown by three schools with endowments of less than $1 billion each that have managed to produce handsome investment returns.
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