12-05-2025
Harvard, Yale face major increase to endowment tax in House plan
The Trump administration has already blocked about US$2.2 billion in federal funding for Harvard. PHOTO: AFP
Republican lawmakers proposed to significantly increase taxes on the richest US universities, broadening a fight between the Trump administration and elite higher education.
Private colleges and universities with at least 500 students and endowments exceeding US$2 million (S$2.61 million) per student would pay a rate of 21 per cent on net investment income under a bill released on May 13 as part of the House's plan to extend the 2017 tax cuts - which is up from the current tax of 1.4 per cent.
Harvard, Princeton, Yale, the Massachusetts Institute of Technology and Stanford have endowments that would meet this threshold, according to data from the 2024 Nacubo-Commonfund Study of Endowments.
A spokesperson for Princeton didn't have an immediate comment on increase, but President Chris Eisgruber said earlier this year that a 'larger endowment tax would damage higher education and our country'.
Other wealthy schools will also be hit with tax increases under the plan, albeit at lower rates. Colleges with endowments over US$750,000 to US$1.25 million per pupil will pay a 7 per cent tax, while colleges with endowments over US$1.25 million per student but below US$2 million would pay 14 per cent.
The Trump administration has already blocked about US$2.2 billion in federal funding for Harvard, and Princeton has also seen federal research funding frozen. The White House has targeted schools for failing to address anti-Semitism on campus, but has expanded its criticisms to include diversity efforts and left-leaning biases. BLOOMBERG
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