The Senate Finance Committee has introduced a proposal to raise the endowment tax on wealthy private colleges and universities to a maximum of 8%, in contrast to the House's more aggressive 21%. While it maintains a tiered structure based on endowment value per student, institutional leaders argue even this increase could detrimentally impact financial aid and research funding. Critics emphasize that funds redirected to taxes could limit support for low-income students. Additionally, the bill retains exemptions for religious colleges and adjusts calculations for institutions with significant international student populations.
The Senate version of the so-called endowment tax is better, but it's still bad and harmful tax policy, said Steven Bloom, assistant vice president of government relations at the American Council on Education.
They're going to take money that would likely have been devoted to financial aid and research and other academic purposes on campus, and they're going to send it to Washington.
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