Bloomberg, University of Notre Dame Loses Endowment Tax Shield in GOP Bill:
It looked like the University of Notre Dame would be safe from a Republican proposal to raise taxes on college endowments.
But a loophole for religious schools was removed from the final tax bill, leaving the South Bend, Indiana-based school to pay a higher levy on its $20 billion endowment.
Under the “One Big Beautiful Bill Act” that President Donald Trump signed last week, wealthy private schools with at least 3,000 students will face a higher tax rate on the net investment income from their endowments. Religious colleges had been exempted from the expanded levy in previous proposals.
Notre Dame’s endowment is now set to face a 4% tax on net investment income. A university spokesperson said the school was “deeply disappointed” in the development.
“Any expansion of the endowment tax threatens to undermine the ability of a broad range of faith-based institutions to serve their religious purpose,” the spokesperson said in an emailed statement.
Forbes, These 26 Rich Private Colleges Just Got A Tax Cut From Republicans:
[W]hile Harvard’s tax bill will likely more than double, some smaller schools with famously left-leaning student bodies (e.g. Swarthmore College and Amherst College) are getting tax relief. That’s because schools with fewer than 3,000 full-time equivalent tuition-paying students will be exempt from the revamped endowment tax beginning next year. It currently applies to private schools with more than 500 full-time equivalent tuition-paying students and endowments worth more than $500,000 per student. …
The Parliamentarian ruled that those three House provisions—exempting religious-affiliated schools, exempting schools that don’t take federal aid, and excluding foreign students from the per capita calculation—didn’t pass the Byrd test.
At that point, Republican senators settled on the 3,000-student threshold in large part to specifically exempt one school from the tax: Hillsdale College, an ultra-conservative, Christian liberal arts college in Hillsdale, Michigan and a GOP darling. It enrolled 1,794 students in 2023, had an endowment worth $584,000 per-student, and notably accepts no federal money, including student aid. (So both the religious exemption and the one for schools taking no federal student aid would have presumably shielded Hillsdale from the endowment tax—before the Parliamentarian gave them the thumbs down.)
South Bend Tribune, Notre Dame Faces Endowment Tax Increase From Trump’s ‘Big, Beautiful Bill’
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