The “one big beautiful” tax-and-spending package President Donald Trump signed included several significant changes for higher education—among them, an increased tax on the endowment income of the nation’s top colleges.
Instead of the existing flat 1.4% tax rate, there is now a new multi-tiered rate of up to 8%, with larger endowments subject to the highest rate. (Schools with fewer than 3,000 tuition-paying students are exempt, regardless of their endowment size.)
The Joint Committee on Taxation estimates this endowment tax will bring in $761 million over 10 years. Higher education experts say the new, higher tax rates could lead to revenue shortfalls and cause some schools to raise tuition prices, cut financial aid or both.
Read more at CNBC.
