At least 41 private colleges and universities would be affected by a new tiered tax on the realized returns of their endowments that was approved by the House Committee on Ways and Means in a party-line vote on Wednesday after more than 17 hours of debate.
Under the provision, part of a far larger Republican budget proposal, private institutions with endowment assets of between $500,000 and $749,999 per enrolled student would continue paying the current 1.4% tax rate on the investment gains of their endowments. The tax rate on investment gains would increase to 7% for universities with endowment assets between $750,000 and $1.25 million per student; 14% for private universities with endowment assets per student between $1.25 million and $2 million; and 21% for endowment assets of at least $2 million per student.
The proposal followed several Republican bills that targeted higher education endowment funds.
The committee-approved legislation will be reviewed by the House Budget Committee, which will soon be tasked with assembling all of the various sections of the larger reconciliation package into one bill for a floor vote, which House Speaker Mike Johnson, R-Louisiana, hopes to pass by Memorial Day.
As an estimated example of the endowment tax’s impact, Harvard’s endowment of more than $50 billion returned 9.6% in 2024, yielding about $4.86 billion that, if realized, would be taxed at a 21% rate, resulting in more than $1 billion in federal taxes. At the current rate, on the same amount of realized return, Harvard would pay more than $68 million in taxes.
While Harvard and a handful of other Ivy League universities would face the highest tax rate, several smaller liberal arts schools, such as Pomona College in California, would face a 14% tax rate. Religious institutions, most prominently the University of Notre Dame, are exempt from the current endowment tax and would remain so under the tiered revision.
According to Nonprofit Issues, 56 universities paid about $380 million in 2023 under the current endowment tax, up from about 33 universities paying $68 million in 2021.
Here are at least 41 universities that meet the parameters subjecting them to the proposed endowment tax, and what tax rate they would pay.
Endowment Tax Targets
| University/College | Endowment Size | Enrollment | Endowment Per Student | Tax Range |
| Harvard University | $53.2B | 24,519 | $2.2M | 21% |
| Yale University | $41.4B | 15,564 | $2.7M | 21% |
| Stanford University | $42.8B | 17,469 | $2.5M | 21% |
| Princeton University | $34.1B | 8,973 | $4.8M | 21% |
| Stanford University | $42.8B | 17,469 | $2.5M | 21% |
| University of Pennsylvania | $22.3B | 29,109 | $766,086 | 7% |
| Duke University | $11.9B | 17,155 | $693,675 | 1.4% |
| Cornell University | $10.7B | 26,264 | $407,401 | Tax when adjusted* |
| Massachusetts Institute of Technology | $24.6B | 11,886 | $2.1B | 21% |
| Washington University | $13.2B | 14,812 | $891,169 | 7% |
| The University of Chicago | $10.4B | 18,523 | $561,464 | 1.4% |
| Dartmouth College | $8.3B | 6,938 | $1.2M | 7% |
| Vanderbilt University | $10.3B | 13,575 | $758,747 | 7% |
| Williams College | $3.7B | 2,150 | $1.7M | 14% |
| Amherst College | $3.6B | 1,914 | $1.9M | 14% |
| California Institute of Technology | $4.3B | 2,463 | $1.7M | 14% |
| Swarthmore College | $2.7B | 1,730 | $1.6M | 14% |
| Pomona College | $3B | 1,690 | $1.8M | 14% |
| Grinnell College | $2.7B | 1,750 | $1.5M | 14% |
| University of Notre Dame | $17.9B | 13,174 | $1.4M | Exempt† |
| Columbia University | $14.8B | 35,769 | $413,766 | Tax when adjusted* |
| Northwestern University | $14.2B | 23,861 | $595,113 | 1.4% |
| Johns Hopkins University | $13.1B | 30,362 | $431,460 | Tax when adjusted* |
| Emory University | $11B | 15,258 | $720,933 | 1.4% |
| The Juilliard School | $1.3B | 1,028 | $1.3M | 14% |
| Bowdoin College | $2.6B | 1,881 | $1.4M | 14% |
| Medical College of Wisconsin | $1.5B | 1,615 | $928,792 | 7% |
| Washington and Lee University | $2B | 2,241 | $892,458 | 7% |
| Claremont McKenna College | $1.2B | 1,370 | $875,912 | 7% |
| Rice University | $7.5B | 8,880 | $844,594 | 7% |
| McPherson College | $1.6B | 880 | $1.8M | 14% |
| Baylor College of Medicine | $1.5B | 831 | $1.8M | 14% |
| Smith College | $2.6B | 2,830 | $918,727 | 7% |
| University of Richmond | $3.5B | 3,722 | $940,354 | 7% |
| Trinity University | $1.9B | 2,694 | $705,270 | 1.4% |
| Davidson College | $1.4B | 1,904 | $735,294 | 1.4% |
| Bryn Mawr College | $1.2B | 1,654 | $725,513 | 1.4% |
| Hamilton College | $1.3B | 1,902 | $683,491 | 1.4% |
| Carleton College | $1.2B | 2,086 | $575,263 | 1.4% |
| Hillsdale College | $972M | 1,823 | $533,187 | 1.4% |
| Berry College | $1.4B | 2,370 | $590,717 | 1.4% |
| Brown University | $7.2B | 11,516 | $625,217 | 1.4% |
*Would receive a tax when adjusted for removing international students.
†Exempt as a religious institution.
Sources: NEPC, NACUBO, college/university websites, House Ways and Means Committee-passed federal tax bill.
Tags: Endowment Tax, higher education