House Passes Bill Raising Private University Endowment Taxes to 21%

The House-passed "Big, Beautiful Bill" proposes a significant tax increase on private universities' endowment investment income, raising rates from the current 1.4% to as high as 21% for institutions with endowments exceeding $2 million per student. This tiered tax structure aims to hold elite universities accountable, as critics argue many operate more like hedge funds and neglect their educational mission, while some have also been accused of tolerating antisemitism on campus. Universities with large endowments, such as Harvard, Yale, Stanford, Princeton, and MIT, could face hundreds of millions in additional annual tax liabilities, prompting concerns about severe budget impacts. Supporters, including House Ways and Means Committee Chairman Jason Smith, contend the bill corrects unfair tax benefits granted to wealthy institutions that do not sufficiently serve the public interest. The bill also includes graduated tax increases on private foundations and exempts public universities and religious organizations from these hikes. Now headed to the Senate, the legislation faces some opposition and potential modifications but is expected to pass with a timeline extending into late summer.