American colleges and universities have accumulated hundreds of billions of dollar in endowment funds.

In 2011, more than 800 schools reported endowments totaling more than $408 billion, according to USA Today’s analysis of data from the National Association of College and University Business Officers. Seventy-four schools had more than $1 billion in their endowment funds; Harvard topped the list with nearly $32 million.

The size of the funds gives rise to debate over how the colleges spend their endowments. The money is commonly used for long-term programs or projects such as dorms, classrooms or athletic facilities that can attract students. They are also used to fund faculty positions. In some cases, use of the money is restricted by the donor.

The money is also used to lower tuition costs at schools such as Stanford University with a $16.5 billion investment fund. Most students from families earning less than $100,000 pay no tuition while families earning less than $200,000 get a discount covered in part by the endowment fund, USA Today reported. With student borrowing and debt on the rise, some critics say more money should be directed to reduce tuition costs. The issue has attracted the attention of the Senate Finance Committee, which held hearings this summer examining why tuition has increased when colleges have such huge endowments that could be used to offset rates.

However, it is best left to fund managers working with college officials to decide the most suitable way to use their monies to benefit the students, whether in direct tuition assistance or support of other programs serving them.

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