Republicans Propose Steep Tax Hike on Private University Endowments Nationwide

Republican lawmakers, led by President Donald Trump, are pushing a significant increase in the tax on private university endowments, raising rates from 1.4% to as high as 21% based on per-student endowment value, excluding international students. The tax aims to hold "woke, elite universities" accountable and address concerns over high tuition costs despite large endowments, but it has sparked opposition from many institutions, which warn the hike could reduce aid for low-income students and hamper educational programs. In response, some large research universities have pledged to increase their endowment spending on student aid and teaching, hoping to moderate the tax proposal, while smaller liberal arts colleges advocate for higher student enrollment thresholds or exemptions to protect their financial models. Additional proposals include basing tax rates on the percentage of endowment revenue allocated to scholarships and exempting religiously affiliated schools. University officials emphasize that endowments primarily fund operating expenses and financial aid, cautioning that the tax could ultimately burden students. The debate reflects broader cultural and political conflicts over higher education funding and the role of elite institutions.