Latest news with #endowments
Asharq Al-Awsat
3 days ago
- General
- Asharq Al-Awsat
Saudi General Authority for Awqaf Launches Awareness Hajj Campaign
Saudi Arabia's General Authority for Awqaf has launched its awareness campaign for the Hajj season, highlighting the vital role of endowments in serving pilgrims. The campaign aims to showcase various endowment initiatives that facilitate the Hajj journey, while providing pilgrims a comprehensive spiritual experience rooted in care, generosity, and solidarity, reported the Saudi Press Agency on Monday. Through its awareness campaign, the authority aims to boost community understanding of the crucial role endowments play in supporting projects related to guidance, accommodation, water supply, translation services, safety, and educational programs at the two holy mosques. It also supports initiatives that integrate various government agencies, such as the Pilgrims City in Al-Jouf Region, which receives pilgrims arriving by land through the Kingdom's northern border crossings, and the Makkah Route Initiative, which aims to serve more than one million pilgrims. The campaign is part of the authority's ongoing efforts to emphasize the developmental and social values of endowments and to activate their role during significant seasons of worship. This reinforces the authority's position as a development enabler and strategic partner in serving pilgrims.
Yahoo
6 days ago
- Business
- Yahoo
Republicans plan to tax US college endowments: Who will that hurt?
Republicans in the United States Congress are pushing for an increase in taxes on US universities, under a new bill that narrowly passed in the House of Representatives last Thursday. The bill's supporters argue that a provision relating to higher educational institutions is crafted to target 'woke' universities. Universities have taken a hit from US President Donald Trump's executive orders and decisions aimed at changing education and immigration in the country, alongside cracking down on pro-Palestine protests that took place on US college campuses last year. The new tax plans aim to increase taxes on what US universities earn from their endowments. An endowment refers to funds or assets donated to a university to keep it financially sustained in the future. Endowments typically comprise charitable donations from alumni, other donors and companies. The bill before the US Congress sets tax rates for universities based on their effective endowments per student – by dividing their total endowments by the number of full-time students at the institution. Earnings from investments made from endowments will be taxed, if the bill becomes law. Most colleges have not been taxed on their endowments for centuries. The Revenue Act of 1909 exempted educational institutions as nonprofits which operate for public interest 'exclusively for religious, charitable, or educational purposes'. As a result, educational institutions did not pay taxes on their investment gains. This changed during Trump's first presidential term. In 2017, the US Congress passed the Tax Cuts and Jobs Act, which introduced a 1.4 percent tax on colleges with per-student endowments of at least $500,000, and at least 500 students who paid tuition. Hence, the tax applies only to some of the wealthiest institutions in the country. This endowment tax generated approximately $380m in 2023, from 56 universities that met the taxation bar. On May 22, the Republican-controlled House of Representatives passed, with a 215-214 vote, what Trump and the legislation's authors have called the One Big Beautiful Bill. Within this bill is a proposal to raise taxes on elite universities. The proposal is tiered, and aims to levy a tax of: 1.4 percent on investment returns of institutions that have a per-student endowment of more than $500,000 but less than $750,000. 7 percent on institutions that have a per-student endowment of more than $750,000 but less than $1,250,000. 14 percent on institutions that have a per-student endowment of more than $1,250,000 but less than $2,000,000. 21 percent on institutions that have a per-student endowment of more than $2,000,000. These percentages apply to universities that had at least 500 tuition-paying students in the previous taxable year and where 50 percent of their full-time tuition paying students are in the US. Universities identified as 'qualified religious institutions' are exempt from this tax. The proposal was drafted by Republican legislators in the Ways and Means Committee, the oldest tax-writing body in the House. 'For too long, universities have received beneficial treatment from our tax code while disregarding the interest of taxpayers,' Jason Smith, Missouri Republican and chairman of the House Ways and Means Committee, said shortly after the bill passed. A fact sheet released by Smith says the tax 'holds woke, elite universities that operate more like major corporations and other tax-exempt entities accountable'. The bill is now headed to the Senate, where Republicans hold 53 seats and Democrats hold 47. It is unclear when the vote will take place, but Trump is urging Republican senators to promptly pass it. On May 22, Trump wrote on his Truth Social platform: 'Thank you to every Republican who voted YES on this Historic Bill! Now, it's time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE!' An investigation by The New York Times found that at least 58 schools could potentially be affected by this. Major universities could fall under the highest tax slab. In the 2024 fiscal year, Harvard University's total endowment was worth approximately $53.2bn – the largest of any university. There are 24,596 students at Harvard, which means the per-student endowment is $2.16m. That means it will have to pay a 21 percent tax if the bill becomes law. Yale University's endowment is valued at $41bn and the university has 15,490 students, bringing the per-student endowment to about $2.7m. While the institute currently pays the 1.4 percent tax, it too will have to pay a 21 percent tax if the bill becomes law. Likewise, Stanford's endowment is $36.5bn and it has 17,529 students, making the per-student endowment about $2.1m. While the institute currently pays the 1.4 percent tax, it will have to pay a 21 percent tax if the bill becomes law. By contrast, University of Pennsylvania's total endowment was $22.3bn as of June 2024 and the institute has 24,219 full-time students, making the per-student endowment $920,764. While the institute currently pays the 1.4 percent tax, it will have to pay a 7 percent tax if the bill becomes law. But because the bill determines which universities are taxable based on per-student endowments, it isn't just big schools that will be affected: Even smaller private institutions, that previously paid 1.4 percent tax, might now have to pay much more. Pomona College in Claremont, California, had a total endowment of $3bn in 2024, of which the institute uses 5 percent each year. The university says 60 percent, or $36m, of financial aid at Pomona is covered by endowment, which also covers about half the institute's operating budget. It has 1,747 students, which means Pomona has a per-student endowment of $1.7m. Until now, it paid a tax worth 1.4 percent of the endowment; if the bill passes, it will be taxed at 14 percent. If the bill passes in the Senate, Trump is almost certain to sign it. But the version of the legislature that makes it out of Congress might be different from the one passed by the House. 'Even if the Senate passes the tax, it's possible that they change the amount of the tax and the criteria for its application in the process,' said Emily Saulnier, editor-in-chief of the Boston College Law Review, a publication at Boston College Law School. Centrist and conservative Republicans in the Senate are divided on the bill. House Speaker Mike Johnson has urged Republican senators to revise it as little as possible. If Senators pass a revised version, the House will need to vote on that new text for it to be passed onto Trump, who will then sign it into law. Wisconsin Republican Senator Ron Johnson has opposed the bill in its current form, arguing it will increase the national deficit, which is the difference between the amount of money the federal government spends and the amount it earns through revenue. Johnson said the House bill would add '$4 trillion' to the deficit. In 2024, the deficit was $1.83 trillion. Republican Kentucky Senator Rand Paul raised similar concerns during a Fox News interview on May 25, saying while he supports parts of the bill, it would 'explode the debt'. But if the bill does pass and is signed by Trump, 'it will apply to all colleges and universities' that meet the conditions set in the legislation, Saulnier said. 'This legislation presents a greater threat to Yale than any other bill in memory,' Yale President Maurie McInnis said in a statement released on May 22. 'The endowment tax places more financial burden on students by making college less affordable. Taxing schools reduces the revenue available for financial aid,' she wrote, adding that 'the endowment tax will undermine the country's global leadership in technology.' During a faculty meeting in 2024, Harvard President Alan M Garber called a raise in endowment taxes 'the threat that keeps me up at night'. The Trump administration has repeatedly attacked higher education institutions, alleging they fail to curb anti-Semitism, or for 'illegal and immoral discrimination' in the form of diversity, equality and inclusion (DEI) programmes. Last year, pro-Palestine protests and encampments sprang up in several US universities, including Columbia, Yale, New York University (NYU) and Harvard. On January 29, Trump signed an executive order titled 'Additional Measures to Combat Anti-Semitism', ordering executive department heads to submit a report on all criminal and civil authorities and actions available for fighting anti-Semitism. A day after he signed this order, Trump was quoted in a White House fact sheet, saying: 'To all the resident aliens who joined in the pro-jihadist protests, we put you on notice: come 2025, we will find you, and we will deport you. I will also quickly cancel the student visas of all Hamas sympathizers on college campuses, which have been infested with radicalism like never before.' Trump has since frozen federal funding to several universities, including Columbia and Harvard. With that funding at risk, universities are even more reliant on their endowment funds to sustain the research they conduct. However, endowments are subject to restrictions and donors decide how most of the endowment is spent. In Harvard's case, donors decide where 70 percent of the annual endowment distribution is spent. On May 22, the Trump administration revoked Harvard's certification to enrol any new foreign students. This move has been temporarily blocked by a federal judge. On Tuesday, the government ordered US embassies abroad to stop scheduling new visa interview appointments for foreign students and exchange visitors, according to an internal cable seen by news agencies.
Al Jazeera
6 days ago
- Business
- Al Jazeera
Republicans plan to tax US college endowments: Who will that hurt?
Republicans in the United States Congress are pushing for an increase in taxes on US universities, under a new bill that narrowly passed in the House of Representatives last Thursday. The bill's supporters argue that a provision relating to higher educational institutions is crafted to target 'woke' universities. Universities have taken a hit from US President Donald Trump's executive orders and decisions aimed at changing education and immigration in the country, alongside cracking down on pro-Palestine protests that took place on US college campuses last year. The new tax plans aim to increase taxes on what US universities earn from their endowments. An endowment refers to funds or assets donated to a university to keep it financially sustained in the future. Endowments typically comprise charitable donations from alumni, other donors and companies. The bill before the US Congress sets tax rates for universities based on their effective endowments per student – by dividing their total endowments by the number of full-time students at the institution. Earnings from investments made from endowments will be taxed, if the bill becomes law. Most colleges have not been taxed on their endowments for centuries. The Revenue Act of 1909 exempted educational institutions as nonprofits which operate for public interest 'exclusively for religious, charitable, or educational purposes'. As a result, educational institutions did not pay taxes on their investment gains. This changed during Trump's first presidential term. In 2017, the US Congress passed the Tax Cuts and Jobs Act, which introduced a 1.4 percent tax on colleges with per-student endowments of at least $500,000, and at least 500 students who paid tuition. Hence, the tax applies only to some of the wealthiest institutions in the country. This endowment tax generated approximately $380m in 2023, from 56 universities that met the taxation bar. On May 22, the Republican-controlled House of Representatives passed, with a 215-214 vote, what Trump and the legislation's authors have called the One Big Beautiful Bill. Within this bill is a proposal to raise taxes on elite universities. The proposal is tiered, and aims to levy a tax of: These percentages apply to universities that had at least 500 tuition-paying students in the previous taxable year and where 50 percent of their full-time tuition paying students are in the US. Universities identified as 'qualified religious institutions' are exempt from this tax. The proposal was drafted by Republican legislators in the Ways and Means Committee, the oldest tax-writing body in the House. 'For too long, universities have received beneficial treatment from our tax code while disregarding the interest of taxpayers,' Jason Smith, Missouri Republican and chairman of the House Ways and Means Committee, said shortly after the bill passed. A fact sheet released by Smith says the tax 'holds woke, elite universities that operate more like major corporations and other tax-exempt entities accountable'. The bill is now headed to the Senate, where Republicans hold 53 seats and Democrats hold 47. It is unclear when the vote will take place, but Trump is urging Republican senators to promptly pass it. On May 22, Trump wrote on his Truth Social platform: 'Thank you to every Republican who voted YES on this Historic Bill! Now, it's time for our friends in the United States Senate to get to work, and send this Bill to my desk AS SOON AS POSSIBLE!' An investigation by The New York Times found that at least 58 schools could potentially be affected by this. Major universities could fall under the highest tax slab. In the 2024 fiscal year, Harvard University's total endowment was worth approximately $53.2bn – the largest of any university. There are 24,596 students at Harvard, which means the per-student endowment is $2.16m. That means it will have to pay a 21 percent tax if the bill becomes law. Yale University's endowment is valued at $41bn and the university has 15,490 students, bringing the per-student endowment to about $2.7m. While the institute currently pays the 1.4 percent tax, it too will have to pay a 21 percent tax if the bill becomes law. Likewise, Stanford's endowment is $36.5bn and it has 17,529 students, making the per-student endowment about $2.1m. While the institute currently pays the 1.4 percent tax, it will have to pay a 21 percent tax if the bill becomes law. By contrast, University of Pennsylvania's total endowment was $22.3bn as of June 2024 and the institute has 24,219 full-time students, making the per-student endowment $920,764. While the institute currently pays the 1.4 percent tax, it will have to pay a 7 percent tax if the bill becomes law. But because the bill determines which universities are taxable based on per-student endowments, it isn't just big schools that will be affected: Even smaller private institutions, that previously paid 1.4 percent tax, might now have to pay much more. Pomona College in Claremont, California, had a total endowment of $3bn in 2024, of which the institute uses 5 percent each year. The university says 60 percent, or $36m, of financial aid at Pomona is covered by endowment, which also covers about half the institute's operating budget. It has 1,747 students, which means Pomona has a per-student endowment of $1.7m. Until now, it paid a tax worth 1.4 percent of the endowment; if the bill passes, it will be taxed at 14 percent. If the bill passes in the Senate, Trump is almost certain to sign it. But the version of the legislature that makes it out of Congress might be different from the one passed by the House. 'Even if the Senate passes the tax, it's possible that they change the amount of the tax and the criteria for its application in the process,' said Emily Saulnier, editor-in-chief of the Boston College Law Review, a publication at Boston College Law School. Centrist and conservative Republicans in the Senate are divided on the bill. House Speaker Mike Johnson has urged Republican senators to revise it as little as possible. If Senators pass a revised version, the House will need to vote on that new text for it to be passed onto Trump, who will then sign it into law. Wisconsin Republican Senator Ron Johnson has opposed the bill in its current form, arguing it will increase the national deficit, which is the difference between the amount of money the federal government spends and the amount it earns through revenue. Johnson said the House bill would add '$4 trillion' to the deficit. In 2024, the deficit was $1.83 trillion. Republican Kentucky Senator Rand Paul raised similar concerns during a Fox News interview on May 25, saying while he supports parts of the bill, it would 'explode the debt'. But if the bill does pass and is signed by Trump, 'it will apply to all colleges and universities' that meet the conditions set in the legislation, Saulnier said. 'This legislation presents a greater threat to Yale than any other bill in memory,' Yale President Maurie McInnis said in a statement released on May 22. 'The endowment tax places more financial burden on students by making college less affordable. Taxing schools reduces the revenue available for financial aid,' she wrote, adding that 'the endowment tax will undermine the country's global leadership in technology.' During a faculty meeting in 2024, Harvard President Alan M Garber called a raise in endowment taxes 'the threat that keeps me up at night'. The Trump administration has repeatedly attacked higher education institutions, alleging they fail to curb anti-Semitism, or for 'illegal and immoral discrimination' in the form of diversity, equality and inclusion (DEI) programmes. Last year, pro-Palestine protests and encampments sprang up in several US universities, including Columbia, Yale, New York University (NYU) and Harvard. On January 29, Trump signed an executive order titled 'Additional Measures to Combat Anti-Semitism', ordering executive department heads to submit a report on all criminal and civil authorities and actions available for fighting anti-Semitism. A day after he signed this order, Trump was quoted in a White House fact sheet, saying: 'To all the resident aliens who joined in the pro-jihadist protests, we put you on notice: come 2025, we will find you, and we will deport you. I will also quickly cancel the student visas of all Hamas sympathizers on college campuses, which have been infested with radicalism like never before.' Trump has since frozen federal funding to several universities, including Columbia and Harvard. With that funding at risk, universities are even more reliant on their endowment funds to sustain the research they conduct. However, endowments are subject to restrictions and donors decide how most of the endowment is spent. In Harvard's case, donors decide where 70 percent of the annual endowment distribution is spent. On May 22, the Trump administration revoked Harvard's certification to enrol any new foreign students. This move has been temporarily blocked by a federal judge. On Tuesday, the government ordered US embassies abroad to stop scheduling new visa interview appointments for foreign students and exchange visitors, according to an internal cable seen by news agencies.
New York Times
20-05-2025
- Business
- New York Times
Republican Plan to Tax Elite Colleges Could Hit in Unexpected Places
McPherson College, in the middle of Kansas wheat country, is a small school that accepts the vast majority of its applicants, many from surrounding towns. It is best known for its degree in classic car restoration. The college might still end up a potential target in a Republican plan aimed primarily at the Ivy League, which would impose billions in taxes on the investment returns of several dozen private colleges and universities. The goal of the proposal, laid out in a report last week from Republicans on the House Ways and Means Committee, is to hold accountable 'woke, elite universities that operate more like major corporations.' McPherson could be on the list because it has an endowment of $1.6 billion, thanks to an anonymous donation a few years ago. An analysis by The New York Times shows that at least 58 schools would potentially be subject to the tax, based on the size of their endowments and enrollments. The list includes highly selective and wealthy institutions like Harvard and the Massachusetts Institute of Technology, but also smaller schools like Berry College in Georgia and DePauw University in Indiana. The tax idea has been discussed by Republicans since at least President Trump's first term, when a 1.4 percent tax was imposed on some endowments. Momentum to broaden it grew in 2023, when JD Vance, then a senator from Ohio, proposed a 35 percent tax on endowments of $10 billion and larger. Now, as President Trump has made challenging the nation's wealthiest colleges a centerpiece of his second-term agenda, the endowment tax could become a potent weapon. During Mr. Trump's second presidential run, his campaign promised to collect billions 'by taxing the large endowments of private universities plagued by antisemitism.' The tax, part of the House proposal that President Trump has called the 'big, beautiful bill,' would be tiered depending on the size of the school's endowment and enrollment, with a top rate of 21 percent for those with endowments of at least $2 million per student. That rate would hit nine schools, including Harvard, Yale and Princeton. The proposal threatens to cost Harvard about $850 million a year, Yale $690 million year, and Princeton $586 million a year, according to estimates by Phillip Levine, an economics professor at Wellesley College, which would also be subject to the tax. The stated aim of the tax, according to the proposal, is to ensure elite schools in the country 'can no longer abuse generous benefits provided through the tax code.' But the plan would envelop other institutions as well, including some in rural parts of Republican states. The earnings from McPherson's endowment would be taxed at 7 percent, potentially costing the school nearly $8 million a year, for example. The criteria for the tax excludes some schools with large endowments, such as the University of Southern California, because of their large enrollment numbers. Columbia University, which has been targeted by Republicans over accusations that it mishandled claims of antisemitism, might not have qualified either, because of the size of its student population in relation to its endowment. But lawmakers tweaked the 'per student' formula used in the bill to exclude the school's large number of international students. As a result, Columbia would pay $79 million a year. While the Times's analysis is based on endowment size, under the proposal's current language the list is likely to grow larger because the tax would also apply to other forms of university investment income, including royalties. The existing 1.4 percent tax hit 56 schools in 2023, according to data from the Internal Revenue Service. Republicans and others argue that the universities should use more of their endowments, some which have accumulated tax-free over centuries. Mr. Trump said on the campaign trail that the proceeds from the tax would 'endow the American Academy,' a free virtual university that he said he would create. But a plan for that school has not materialized, and any money collected through the new taxes would go into the government's general fund. Schools have pushed back against the tax, noting that they use their endowments to fund the education of poor and middle-class students. Of the $30 billion that schools spent in endowment funds in 2024, nearly half went to financial aid, according to an analysis by the National Association of College and University Business Officers. (Vice President Vance was a beneficiary of this need-based aid. He attended Yale Law School as a Marine Corps veteran with a financial aid package that he later wrote 'exceeded my wildest dreams.') Christopher L. Eisgruber, Princeton's president, wrote in a recent message that 71 percent of students in this year's freshman class received no-loan financial aid funded by the school's endowment, with the average grant totaling $73,000. 'This tax is a scholarship tax,' said Steven M. Bloom, an assistant vice president at the American Council on Education, a large industry trade group that is opposing the proposal. Williams College, a liberal arts school in Massachusetts, would be subject to at least a 14 percent tax. In an interview, its president, Maud S. Mandel, said the school devoted $92 million from its endowment this year to help over half the school's student body. 'Any tax on the endowment would have a direct impact on that,' she said. And in California, Pomona College's vice president, Jonathan B. Williams, said the tax would cost the school $40 million a year, the equivalent of 460 full scholarships. Its enrollment is about 1,700. 'This will shift the cost of tuition squarely on to families,' he said. Universities have dispatched lobbyists to Capitol Hill to try to water down the plan's impact. Williams College has partnered with other colleges to hire a lobbying firm. DePauw University said it was also working with a group of small colleges to tell lawmakers how they would be affected. Four medical schools could also be on the list, including Baylor College of Medicine in Houston, which is not affiliated with Baylor University. Lori Williams, vice president of communications for the medical school, wonders whether independent medical schools were included accidentally. 'We have been engaging with legislators to seek to remedy this,' Ms. Williams said. Lawmakers crafted an exception for religious institutions that could exempt some of the 58 schools included in The Times's analysis. But schools formed before July 4, 1776, would be excluded from that exemption. That means Ivy League schools opened by religious groups before the nation's founding would not be eligible. David A. Super, a professor at Georgetown University Law Center, said that could raise legal issues. 'Particularly problematic is reliance on a date: Some faiths have established more colleges in some eras, some faiths have established more in other times,' Mr. Super said. 'That starts to look like discrimination among religions.' Matthew Lindsey, president of the Kansas Independent College Association, hopes the religious exemption will ultimately protect McPherson, which was founded by the Church of the Brethren, a pacifist Protestant denomination. 'Clearly McPherson is not the target of this legislation,' Mr. Lindsey said, noting that the bill 'very much talked about woke colleges. They're not talking about McPherson in that language.' McPherson, in McPherson, Kan., became rich practically overnight in 2022, when an anonymous donation grew its endowment to $1.6 billion from $50 million. The school's classic car restoration program has also attracted support from the comedian Jay Leno, aclassic car collector. McPherson officials did not respond to a request for comment, but Mr. Lindsey said the school used its endowment to help students graduate debt free. He said his association had been working to notify the Kansas congressional delegation of the predicament. Representative Tracey Mann, a Republican and a supporter of President Trump who represents the congressional district that includes McPherson, did not respond to requests for comment.
Bloomberg
12-05-2025
- Business
- Bloomberg
Harvard, Yale Face Major Increase to Endowment Tax in House Plan
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 $2 million per student would pay a rate of 21% on net investment income under a bill released Monday as part of the House's plan to extend the 2017 tax cuts. That's up from the current tax of 1.4%.
