In anticipation of the Senate’s anticipated ratification of Donald Trump’s “big, beautiful bill” in the upcoming weeks, US colleges have begun a vigorous last-minute lobbying effort against a planned tax rise.
Depending on the size of the fund and student body, the president’s signature budget legislation proposes raising taxes on university revenue from endowment investments from 1.4% to as much as 21%.
Why are elite universities like Harvard and Princeton fighting back?
Several prestigious colleges, such as Princeton and Harvard, are advocating for this to be modified to a requirement that they spend 5% of their endowment worth each year. This would align them with the regulations that private foundations adhere to in order to preserve their tax-free status.
Endowment assets are invested by universities, and a portion of the money raised is used to support campus activities, financial assistance, student fellowships, and faculty salaries. For some, like Harvard, which has a $53 billion fund, investment returns account for almost a third of income and are the school’s single biggest source of support.
The Joint Committee on Taxation estimates that the government’s tax hike would generate $6.7 billion over ten years. This is just one of several actions the Trump administration has taken this year against prestigious US colleges in what it says is an effort to counteract leftist prejudice and antisemitism. Budgets have been cut, international student visas have been stopped, and accreditation has been jeopardized.
Harvard has sued the government to stop some of the measures because it is under a lot of pressure. It and other organizations have responded by making significant investments in lobbying against the proposed tax.
How much lobbying are universities doing to block the tax hike?
According to a Financial Times examination of disclosure reports, lobbying costs among the top 100 colleges jumped beyond $10 million in the first quarter of this year. This is an approximately 31% increase over the same time last year, before to Trump’s election.
Ivy League universities have been campaigning for money, financial assistance, and endowments and have been among the largest spenders. The numbers are probably understated. Leading lobbyist Jeff Miller of Miller Strategies has signed on to represent Northwestern, Johns Hopkins, and Cornell in the first quarter of this year, although he has not yet revealed the rates he would charge for those clients.
In the first quarter, Harvard reported spending $340,000 on both internal and external lobbying, up from $160,000 during the same time in 2024. To support its interests, the institution has enlisted the services of Ballard Partners, another renowned lobbying company with connections to the White House.
Yale spent $280,000, up 56% from the previous year, while Columbia more than quadrupled its lobbying to $520,000 in the first quarter of this year. It’s uncertain if the investment will pay off.
