Dive Brief:

• Provisions in the House Republicans' tax bill which would impose a 1.4% excise tax on private university endowments valued at $100,000 or more per full-time student is concerning a number of higher ed advocates.
• Analysts consider an institution to be in good financial health if it has $300,000 per full-time student in the endowment fund, which means the proposed ceiling would even more threaten the vitality of the industry as a whole.
• The elimination of tax-exempt private bonds will also greatly hinder future construction projects, if passed.

Dive Insight:

The endowments of private colleges have been favorite topics of scrutiny lately. While on the campaign trail, President Trump took aim at the accounts, saying colleges had a responsibility to dip into endowment funds to solve the affordability crisis in higher ed. And just before the new Congress was sworn in, legislators launched an inquiry into the spending practices of colleges and universities as it relates to endowment funds. This new proposal would seemingly penalize colleges for not using the funds for purposes which directly touch the student. 

But if analysts consider an amount three times the threshold for these new tax penalties to be good financial health, the tax bill is another indication of the disconnect between what legislators think about higher ed and what reality has shown. And since it doesn't appear there will be any champions in this administration, the onus is on individual campus GR teams to form coalitions and rally in the district offices of elected officials to get the attention of lawmakers and fight against the provisions which might further threaten the vitality of the industry.