The tax bill includes a tax on institutions with endowments larger than $500,000 per student. The grad student tuition waiver tax is not present. Student loan interest deduction still present as well.
As the GOP tax bills passed by the House and Senate coalesce into one, destined for President Trump’s desk, the highest echelon of the academic community is prepared for a broadside on their endowments.
Though it is still unclear what the final terms will look like, the legislation would impose a 1.4% tax on investment earned by private colleges that have endowments of over $500,000 or more per student. Thirty-two institutions stand to be affected – including many colleges from the Ivy League and NESCAC in the North East, and other blue chip universities around the country. The colleges say this will decrease access for lower-income students as endowments have enormous earmarked funds for financial aid.
Institutions have been hesitant to speak out about the bill for fear of putting a target on their back in the form of a tweet from the president himself. But it is widely suspected that the legislation was put forth by certain members of Congress as punishment for perceived political bias in higher education.
Instead of venting in the public square, universities are hard at work focusing efforts via government relations officials, leveraging alumni who might have influence — especially in Congress. So far, the bill has changed at least five times.
