Reply to How Princeton is Getting Around the Endowment Tax

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Princeton makes financial aid changes presumably to get it to fewer than 3,000 “tuition-paying” students.

https://www.princeton.edu/news/2025/08/07/princeton-enhances-financial-aid-again-it-welcomes-class-2029-which-includes[/quote]

[b]If the administrations top "targets" start adjusting to avoid being taxed I expect the IRS regs to get reinterpreted to cut off the easy paths out of taxation. A few schools could just eliminate tuition but that isn't feasible for most.[/b] I suspect longer term "tuition paying" will be replaced with a strict size limit which protects Hillsdale but cuts off the avoidance opportunities for the Ivy schools. Top SLACs are going to win big as this shakes out as they are resource rich, not dependent on federal money, and are effectively shielded because of the republican desire to protect Hillsdale at all costs.   [/quote]

Second bolded sentence is why the first probably won’t happen. Only a few schools can do this. That, and the IRS already was challenged on this previously during the public consultation process in 2020 and would likely lose the ensuing lawsuit since they are on record defending the current approach, without a good legal rationale for changing course now. [b]Congress could have taken “tuition-paying” out of the legislation, but didn’t.[/b][/quote]

The current approach isn't the previous approach which was solely based on endowment size. It may be similar but it isn't the same and is open to revisiting from a regulatory standpoint. More important is the simple fact that this administration doesn't care, they want to punish. Harvard can do anything that Princeton does to get around the tax and I'm not buy the idea that the buffoons in the Whitehouse will meekly allow workarounds. They will aggressively work to ensure punishment.

[/quote]

You can’t regulate in a way that is inconsistent with the plain language of a statute. The Trump Supreme Court has made that clear.  The IRS can’t write “tuition-paying” out of the statute. [/quote]

Let’s just wait and see how things turn out when Princeton tries to get creative.[/quote]

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