4 days ago
Small colleges pursue endowment tax carveouts
Presented by National Association of Independent Colleges and Universities
THE TAXMAN COMETH — The country's small, private liberal arts colleges are speaking out about what they want from the Senate's anticipated take on a revised college endowment tax.
— College presidents, particularly those in states whose lawmakers work on the Senate's finance committee, of course would rather have Congress make no changes to the existing 1.4 percent tax on university investment income first adopted to finance President Donald Trump's 2017 tax cuts.
— Another idea floated by a coalition of 24 small colleges in 17 states: Spare schools that enroll fewer students.
— 'Have a different tax rate for schools under 5,000 students,' Anne Harris, the president of Grinnell College in Iowa, told your host of the coalition's proposals. 'That gets you to make that bright line of distinction between the financial model of a large research institution and the financial model of a small, liberal arts college.'
— More complex proposals would be based on the percentage of annual school endowment distributions devoted to student financial aid — insulating schools that use more of their endowments on student aid from higher tax rates. Institutions have also proposed an exemption for schools with a religious affiliation.
— Such ideas could also base endowment tax rates on the number of students who pay full tuition and favor schools with high proportions of students who are eligible for Pell Grants. The Wall Street Journal reported some of the country's wealthiest schools are also supporting a requirement to distribute 5 percent of their endowments' value annually.
— 'The most fundamental perspective we're trying to offer is that the endowment tax is a burden on students,' said Douglas Hicks, the president of Davidson College in North Carolina. 'So, our first position is to not increase the endowment tax for anyone.'
— Hicks added: 'Schools that are meeting those goals of affordability, low indebtedness, high achievement, and high graduation rates should receive breaks from this tax.'
— The small schools are working with the OGR government relations firm, which was hired by the American Council on Education to lobby on endowment tax issues and is serving as a coordinator for the individual work of the coalition's members. Some schools have also hired their own lobbyists, including Davidson College, which is working with Brownstein Hyatt Farber Schreck.
— 'This is a coalition that's nationwide, that's being represented by both Democratic and Republican senators and Congress folks — and who have very different communities that they're operating within,' said Harris, who said she has spoken with Sen. Chuck Grassley (R-Iowa) about the issue.
— Sen. James Lankford (R-Okla.) and other senators are pushing to reduce the proposed tax hike on university endowment earnings included in the Republican megabill, POLITICO's Brian Faler reported Thursday. Lankford declined to discuss details, saying 'we don't have consensus,' though he expressed confidence they would reach an agreement.
IT'S MONDAY, JUNE 9. WELCOME TO WEEKLY EDUCATION. Russ Vought, the two-time director of the Office of Management and Budget, is just hitting his stride as his agenda to fundamentally remake government from the ground up remains in high gear.
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Higher Education
CAUGHT IN A VISE — President Donald Trump's campaign against two of the planet's best-known universities is laying bare just how unprepared academia was to confront a hostile White House.
— Schools never imagined facing an administration so willing to exercise government power so quickly — targeting the research funding, tax-exempt status, foreign student enrollment and financial aid eligibility schools need to function.
— 'Perhaps it's a failure of imagination on the part of universities,' Lee Bollinger, the former president of Columbia University, told your host. 'It feels now like there has been a naïveté on the part of universities. There's been no planning for this kind of thing.'
— That leaves schools right where the president wants them.
— Even as Ivy League schools, research institutions, and college trade associations try to resist Trump's attacks in court, campus leaders are starting to accept they face only difficult choices: negotiate with the government, mount a painful legal and political fight, or simply try to stay out of sight.
— 'Every school has had an option to correct course and work with the administration, or stand firm in their violations of the law,' a senior White House official told your host. 'They have an option, they know very well what to do.'
— The real question, according to Bollinger, is how far the White House will go and how much resistance the schools are willing to put up.
— 'The power of government is so immense that if they want to destroy institutions, they can,' he said. 'What you do in that kind of environment is you stand on principle.'
NCAA
NEW ERA, OLD PROBLEMS — Welcome to the new, professionalized era of college sports.
— U.S. District Judge Claudia Wilken gave her final approval on Friday to a landmark legal settlement on college athlete pay that will rewrite the rules of the industry — and open a new period of congressional lobbying and litigation.
— Athletic leaders will address the media today to discuss a newly-established College Sports Commission — an organization led by a longtime Major League Baseball executive — that will be responsible for implementing the settlement's terms on player revenue sharing, endorsement deals, and roster limits. Schools are racing to meet a set of looming deadlines needed to implement the deal in time for the coming academic term.
— But again: The transformative settlement does not grant college overseers their desired protection from antitrust laws, nor does it ban classifying athletes as employees, or stop conflicting state laws. Expect more pressure from schools on Congress in the weeks ahead, NCAA President Charlie Baker said Friday.
— 'The NCAA and college sports leaders have made tremendous, positive change in recent years, but only Congress can address these issues,' Baker said in a letter to schools.
— A House commerce subcommittee is scheduled to hold a hearing Thursday to discuss the latest conservative-led legislative proposal for the industry.
Education Department
BREAKING UP IS HARD TO DO — The Education Department is trying to determine if employees it decided to terminate have accepted other jobs in recent weeks.
— The agency is setting out plans to 'reintegrate' workers cut during a massive reduction in force that sparked a federal court injunction that the Trump administration appealed to the Supreme Court on Friday.
— Employees who were placed on administrative leave in March will not be formally separated from the department as planned this week, according to an email to workers sent Friday by the department's top human resources officer, your host reports.
— Part of the plan also includes finding out how many employees are left to bring back to work.
— The agency asked affected employees to voluntarily disclose any 'current outside employment or offers' they may have accepted since March, when the Trump administration announced it was cutting roughly half of the department's workforce.
— Friday's announcement was prompted by a federal judge's order last month to block the administration from firing department workers, after ruling the announced terminations were a thinly veiled effort to dismantle the entire Education Department without congressional approval.
— The Trump administration is pressing the Supreme Court for approval to carry out the firings.
— 'We have all expectations to believe we'll be successful there, but until then we're complying with the court's ruling and abiding by the law,' department spokesperson Madi Biedermann told POLITICO.
NEW HIRES — Meanwhile, a new set of political appointees are headed to the department.
— Lindsey Burke, until now The Heritage Foundation's top education policy official, was tapped to serve as the department's deputy chief of staff for policy and programs.
— Jeffrey Andrade, a former senior Republican staffer for the House education committee, will serve as a deputy assistant secretary for policy in the department's Office of Postsecondary Education.
— Christopher McCaghren, who served as a department official during the first Trump administration, will be the agency's deputy assistant secretary for higher education programs.
— Nicholas 'Nick' Moore, Alabama's workforce office director under Republican Gov. Kay Ivey, will serve as the department's deputy assistant secretary for career, technical, and adult education.
— Jason Delisle, a widely-known expert on higher education finance and policy, will be the chief economist and a senior adviser, in the department's undersecretary office. Office of the Under Secretary.
— Casey K. Sacks, a former department deputy assistant secretary for community colleges, will be a senior policy adviser on workforce and AI issues.
— Meir Katz, a former senior counsel in the department's civil rights office, will be a senior civil rights adviser.
Syllabus
— Chinese students want an American education less than they used to: The Economist
— The maker of ChatGPT plans to embed its tools in every facet of campus life: The New York Times
— State Department tells consulates to resume processing Harvard visas: The Washington Post
— College students are using 'no contact orders' to block each other in real life: The Wall Street Journal
— Trump's NIH budget plan would make competing for grants much harder: POLITICO Pro
