University Endowment Tax Quadruples Under New Tax Plan

New Tax Rates for University Endowments

• 🎯 The new tax plan introduces three new tax rates for university endowments, based on the student-adjusted endowment.
• 💡 Schools with adjusted endowments between $500,000 and $750,000 per student will continue to pay a 1.4% tax.
• 📈 Those with endowments between $750,000 and $2 million per student will face a 4% tax.
• 🚀 Endowments exceeding $2 million per student will be subject to an 8% tax, a significant increase from the previous rate.

Elite Universities Affected

• 🎓 The highest tax bracket (8%) applies to elite institutions with adjusted endowments over $2 million per student, including Harvard, Yale, Princeton, MIT, and Stanford.
• 📊 Princeton has the highest adjusted endowment at $3.7 million per student.
• 💰 Harvard, despite having the largest overall endowment at $53 billion, is around the $2 million per student mark.

Exemptions and Other Schools

• 🏫 Schools with fewer than 3,000 students are exempt from the higher tax rates.
• 🎁 Amherst, with an adjusted endowment of $1.9 million per student, is exempt due to its enrollment of 1,900 students and will receive a tax cut.
• 🏛️ Universities like UPenn, Columbia, Dartmouth, Caltech, Notre Dame, and Vanderbilt will pay the 4% tax.
• ⚠️ A proposed exemption for religious-affiliated schools was removed in the Senate, meaning Notre Dame will now pay the 4% tax.