College Endowment Tax Hike

[Anonymous]

This was the statement by the acting president of Pomona College

Federal Endowment Tax
As you know, one of the continuing issues being debated in Congress is increasing the federal tax on endowments of nonprofit colleges and universities whose endowment per student exceeds $500,000, which includes Pomona. As shared previously, since this tax was introduced in 2017, the cost to Pomona has been more than $16 million, which is roughly equivalent to 184 full student scholarships. As part of the emerging budget package, the Republican majority in both houses of Congress is discussing increasing the current 1.4% tax rate to between 10% and 21%, a dramatic increase that would impact both the College’s operations and the endowment. We are working closely with peer institutions through the Small Colleges Coalition to express to Congressional offices the negative impact such increases would have on the College’s investment of endowment resources in financial aid and other essential aspects of our educational mission. In addition, we are working to convey this concern through our own Washington, D.C. contacts and our higher education consortia, including the American Council on Education and the National Association of Independent Colleges and Universities.

We also recognize that other institutions, including Harvard, Princeton, Johns Hopkins, Brown, and others, are facing different challenges from the current administration. These challenges include the administration’s series of announcements that it is withholding hundreds of millions and even billions of dollars in federal funding that had been allocated to those universities for research and other critical programs. While Pomona’s faculty are recipients of some federal grants, the College’s budget does not depend on federal investments like those other institutions.

Pomona community members have shared with us their own concerns about the potential impact of Executive Orders and other federal decisions on the College’s finances. While the decisions that Congress might ultimately make remain quite unclear, and the most extreme outcomes being discussed would create severe budget challenges for Pomona, I want to stress that we are prepared to adapt our budget to meet a wide range of outcomes from the above decisions. We do not receive much federal funding, donors to the College across generations and strong investment performance have enhanced our endowment, and Pomona has practiced careful budget management across the years. For the 2026 academic year, we have prepared well, including by identifying savings initiatives, and expect the College’s budget to be stable as we face this period of uncertainty around federal funding and tax-policy discussions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

This part is not quite accurate. Undergraduates receive about $260 million of this, but almost all of it is absorbed through lower operating revenues (it is “net student income”) rather than through a specific distribution from the endowment.

A higher tax would reduce the endowment’s distribution to the operating budget, but that could be absorbed through multiple channels. Given the earmarking of much of the endowment, those specific areas would have to absorb much of the hit (professorships, certain proframs, research, and, yes, some scholarships but more of the “named” variety than financial aid). And the freely usable part would probably hit staff as pay and benefits are half of the operating budget.

This is an area that deserves scrutiny. Administrative costs are out of control at most elite institutions. Too many administrators earning unreasonably high salaries.

But you're cool with tax exempt for the NRA? Talk about fat cats.

If admin costs are out of control, Congress can require limits to keep tax exempt status and apply to all tax exempt organizations. How would mega churches like that? What this is is an attack on higher ed. Nothing less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Makes no sense to pick on colleges and not other tax-exempt organizations.
Trump now also wants to go after people making more than $2.5 million. I am not one of them, but that seems unfair too.

I am good with additional taxes on those making over $2.5M and taxing the mega churches and other tax exempt organizations that are not doing their fair share to make a positive contribution to society.

Can someone explain where this is going? We are cutting billions in funding across the board and now are requesting to receive a bunch of funding from colleges and wealthy folks to do....what? If it's just for the immigration policy, this is a completely reckless use of public funds.

[Anonymous]

College endowment hike, destruction of the NSF, cancelling or freezing funds to university research (including their medical schools and hospital systems, forcing university admin to spend all their time fighting the government - this is the president and GOP trying to destroy our system of higher education. Which has been the envy of the world.

[Anonymous]

Anonymous wrote:This was the statement by the acting president of Pomona College

Federal Endowment Tax
As you know, one of the continuing issues being debated in Congress is increasing the federal tax on endowments of nonprofit colleges and universities whose endowment per student exceeds $500,000, which includes Pomona. As shared previously, since this tax was introduced in 2017, the cost to Pomona has been more than $16 million, which is roughly equivalent to 184 full student scholarships. As part of the emerging budget package, the Republican majority in both houses of Congress is discussing increasing the current 1.4% tax rate to between 10% and 21%, a dramatic increase that would impact both the College’s operations and the endowment. We are working closely with peer institutions through the Small Colleges Coalition to express to Congressional offices the negative impact such increases would have on the College’s investment of endowment resources in financial aid and other essential aspects of our educational mission. In addition, we are working to convey this concern through our own Washington, D.C. contacts and our higher education consortia, including the American Council on Education and the National Association of Independent Colleges and Universities.

We also recognize that other institutions, including Harvard, Princeton, Johns Hopkins, Brown, and others, are facing different challenges from the current administration. These challenges include the administration’s series of announcements that it is withholding hundreds of millions and even billions of dollars in federal funding that had been allocated to those universities for research and other critical programs. While Pomona’s faculty are recipients of some federal grants, the College’s budget does not depend on federal investments like those other institutions.

Pomona community members have shared with us their own concerns about the potential impact of Executive Orders and other federal decisions on the College’s finances. While the decisions that Congress might ultimately make remain quite unclear, and the most extreme outcomes being discussed would create severe budget challenges for Pomona, I want to stress that we are prepared to adapt our budget to meet a wide range of outcomes from the above decisions. We do not receive much federal funding, donors to the College across generations and strong investment performance have enhanced our endowment, and Pomona has practiced careful budget management across the years. For the 2026 academic year, we have prepared well, including by identifying savings initiatives, and expect the College’s budget to be stable as we face this period of uncertainty around federal funding and tax-policy discussions.

This would hit top SLACs hard. Pomona and many others would be in the 20% bracket. And about half of their operating revenues come from their endowment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

This part is not quite accurate. Undergraduates receive about $260 million of this, but almost all of it is absorbed through lower operating revenues (it is “net student income”) rather than through a specific distribution from the endowment.

A higher tax would reduce the endowment’s distribution to the operating budget, but that could be absorbed through multiple channels. Given the earmarking of much of the endowment, those specific areas would have to absorb much of the hit (professorships, certain proframs, research, and, yes, some scholarships but more of the “named” variety than financial aid). And the freely usable part would probably hit staff as pay and benefits are half of the operating budget.

This is an area that deserves scrutiny. Administrative costs are out of control at most elite institutions. Too many administrators earning unreasonably high salaries.

But you're cool with tax exempt for the NRA? Talk about fat cats.

If admin costs are out of control, Congress can require limits to keep tax exempt status and apply to all tax exempt organizations. How would mega churches like that? What this is is an attack on higher ed. Nothing less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This was the statement by the acting president of Pomona College

Federal Endowment Tax
As you know, one of the continuing issues being debated in Congress is increasing the federal tax on endowments of nonprofit colleges and universities whose endowment per student exceeds $500,000, which includes Pomona. As shared previously, since this tax was introduced in 2017, the cost to Pomona has been more than $16 million, which is roughly equivalent to 184 full student scholarships. As part of the emerging budget package, the Republican majority in both houses of Congress is discussing increasing the current 1.4% tax rate to between 10% and 21%, a dramatic increase that would impact both the College’s operations and the endowment. We are working closely with peer institutions through the Small Colleges Coalition to express to Congressional offices the negative impact such increases would have on the College’s investment of endowment resources in financial aid and other essential aspects of our educational mission. In addition, we are working to convey this concern through our own Washington, D.C. contacts and our higher education consortia, including the American Council on Education and the National Association of Independent Colleges and Universities.

We also recognize that other institutions, including Harvard, Princeton, Johns Hopkins, Brown, and others, are facing different challenges from the current administration. These challenges include the administration’s series of announcements that it is withholding hundreds of millions and even billions of dollars in federal funding that had been allocated to those universities for research and other critical programs. While Pomona’s faculty are recipients of some federal grants, the College’s budget does not depend on federal investments like those other institutions.

Pomona community members have shared with us their own concerns about the potential impact of Executive Orders and other federal decisions on the College’s finances. While the decisions that Congress might ultimately make remain quite unclear, and the most extreme outcomes being discussed would create severe budget challenges for Pomona, I want to stress that we are prepared to adapt our budget to meet a wide range of outcomes from the above decisions. We do not receive much federal funding, donors to the College across generations and strong investment performance have enhanced our endowment, and Pomona has practiced careful budget management across the years. For the 2026 academic year, we have prepared well, including by identifying savings initiatives, and expect the College’s budget to be stable as we face this period of uncertainty around federal funding and tax-policy discussions.

This would hit top SLACs hard. Pomona and many others would be in the 20% bracket. And about half of their operating revenues come from their endowment.

+1, Pomona and the like haven’t been hit by the research funding cuts except for a few professors with high profile NSF or NIH grants. This will decimate them.

[Anonymous]

This admin truly is doing everything it can to wreck America. Economy, education, actual govt, nothing is of the table. At this rate we will soon match Russia in being the most self destructive nation. Go Orange! Bros don't realize that it will be hard to get it back. Took 3-5 years and Soviet science was gone and same for the educated people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

DP. Nice try to make this sound reasonable when it isn't. Trump wants to tax the endowments of higher ed more while giving breaks to the richest Americans and for-profit corporations. The "wealth" of the institutions goes to supporting students. The wealth of the individuals and corporations just makes rich people richer.

And how is taxing those institutions who have been getting a free ride for decades if not centuries, bad but for-profit and rich people who pay taxes annually getting a break unfair?

I’m betting you’re one of the nonprofit takers that hoards resources and money under the auspices of “saving the world”.

Times up pal, pay your fair share.

[Anonymous]

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

You just confirmed that you don't really know how endowments work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

The problem isn’t really with any of the ideas for cutting costs or raising revenue.

Someone could make a reasonable argument for all of them.

The problem is that everything is being done in a sudden, random, cruel, vengeful way.

If Trump somehow does something good, he’ll poison that good idea. No one will believe that anything he adopts could be good. Once he’s out, everything he’s done will be reversed.

+1

It will be reversed and it will also give the other side an excuse to go after the evangelical organizations with a vengeance. They will be pretty sorry that this can of worms was opened in the end.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

DP. Nice try to make this sound reasonable when it isn't. Trump wants to tax the endowments of higher ed more while giving breaks to the richest Americans and for-profit corporations. The "wealth" of the institutions goes to supporting students. The wealth of the individuals and corporations just makes rich people richer.

And how is taxing those institutions who have been getting a free ride for decades if not centuries, bad but for-profit and rich people who pay taxes annually getting a break unfair?

I’m betting you’re one of the nonprofit takers that hoards resources and money under the auspices of “saving the world”.

Times up pal, pay your fair share.

wander along Troll.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

The problem isn’t really with any of the ideas for cutting costs or raising revenue.

Someone could make a reasonable argument for all of them.

The problem is that everything is being done in a sudden, random, cruel, vengeful way.

If Trump somehow does something good, he’ll poison that good idea. No one will believe that anything he adopts could be good. Once he’s out, everything he’s done will be reversed.

+1

It will be reversed and it will also give the other side an excuse to go after the evangelical organizations with a vengeance. They will be pretty sorry that this can of worms was opened in the end.

I wouldn’t be so sure about that. The previous endowment tax from the 2017 tax bill never was repealed despite a strong push from universities. It’s just not that strong of a constituency, and there are much higher priorities for Dems on the tax front.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This was the statement by the acting president of Pomona College

Federal Endowment Tax
As you know, one of the continuing issues being debated in Congress is increasing the federal tax on endowments of nonprofit colleges and universities whose endowment per student exceeds $500,000, which includes Pomona. As shared previously, since this tax was introduced in 2017, the cost to Pomona has been more than $16 million, which is roughly equivalent to 184 full student scholarships. As part of the emerging budget package, the Republican majority in both houses of Congress is discussing increasing the current 1.4% tax rate to between 10% and 21%, a dramatic increase that would impact both the College’s operations and the endowment. We are working closely with peer institutions through the Small Colleges Coalition to express to Congressional offices the negative impact such increases would have on the College’s investment of endowment resources in financial aid and other essential aspects of our educational mission. In addition, we are working to convey this concern through our own Washington, D.C. contacts and our higher education consortia, including the American Council on Education and the National Association of Independent Colleges and Universities.

We also recognize that other institutions, including Harvard, Princeton, Johns Hopkins, Brown, and others, are facing different challenges from the current administration. These challenges include the administration’s series of announcements that it is withholding hundreds of millions and even billions of dollars in federal funding that had been allocated to those universities for research and other critical programs. While Pomona’s faculty are recipients of some federal grants, the College’s budget does not depend on federal investments like those other institutions.

Pomona community members have shared with us their own concerns about the potential impact of Executive Orders and other federal decisions on the College’s finances. While the decisions that Congress might ultimately make remain quite unclear, and the most extreme outcomes being discussed would create severe budget challenges for Pomona, I want to stress that we are prepared to adapt our budget to meet a wide range of outcomes from the above decisions. We do not receive much federal funding, donors to the College across generations and strong investment performance have enhanced our endowment, and Pomona has practiced careful budget management across the years. For the 2026 academic year, we have prepared well, including by identifying savings initiatives, and expect the College’s budget to be stable as we face this period of uncertainty around federal funding and tax-policy discussions.

This would hit top SLACs hard. Pomona and many others would be in the 20% bracket. And about half of their operating revenues come from their endowment.

SLACS can absorb the hit but they will do so at the expense of Financial aid. Where it will really hurt is that you'll see massive drops in financial aid and the elite SLACs will just go back to serving their traditional HHI base and FGLI and the like will be pushed out. Hurting brown people is what they do best.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This was the statement by the acting president of Pomona College

Federal Endowment Tax
As you know, one of the continuing issues being debated in Congress is increasing the federal tax on endowments of nonprofit colleges and universities whose endowment per student exceeds $500,000, which includes Pomona. As shared previously, since this tax was introduced in 2017, the cost to Pomona has been more than $16 million, which is roughly equivalent to 184 full student scholarships. As part of the emerging budget package, the Republican majority in both houses of Congress is discussing increasing the current 1.4% tax rate to between 10% and 21%, a dramatic increase that would impact both the College’s operations and the endowment. We are working closely with peer institutions through the Small Colleges Coalition to express to Congressional offices the negative impact such increases would have on the College’s investment of endowment resources in financial aid and other essential aspects of our educational mission. In addition, we are working to convey this concern through our own Washington, D.C. contacts and our higher education consortia, including the American Council on Education and the National Association of Independent Colleges and Universities.

We also recognize that other institutions, including Harvard, Princeton, Johns Hopkins, Brown, and others, are facing different challenges from the current administration. These challenges include the administration’s series of announcements that it is withholding hundreds of millions and even billions of dollars in federal funding that had been allocated to those universities for research and other critical programs. While Pomona’s faculty are recipients of some federal grants, the College’s budget does not depend on federal investments like those other institutions.

Pomona community members have shared with us their own concerns about the potential impact of Executive Orders and other federal decisions on the College’s finances. While the decisions that Congress might ultimately make remain quite unclear, and the most extreme outcomes being discussed would create severe budget challenges for Pomona, I want to stress that we are prepared to adapt our budget to meet a wide range of outcomes from the above decisions. We do not receive much federal funding, donors to the College across generations and strong investment performance have enhanced our endowment, and Pomona has practiced careful budget management across the years. For the 2026 academic year, we have prepared well, including by identifying savings initiatives, and expect the College’s budget to be stable as we face this period of uncertainty around federal funding and tax-policy discussions.

This would hit top SLACs hard. Pomona and many others would be in the 20% bracket. And about half of their operating revenues come from their endowment.

SLACS can absorb the hit but they will do so at the expense of Financial aid. Where it will really hurt is that you'll see massive drops in financial aid and the elite SLACs will just go back to serving their traditional HHI base and FGLI and the like will be pushed out. Hurting brown people is what they do best.

What does this even mean? You make it sound like the lacs are serving Lord Trump, ffs. Lacs have been the leaders on providing financial aid, and before the AA ban were the leaders in diversity.