I’ve recently posted about rising political interest in addressing the wealthiest universities and their endowments. Now there’s a new development, as a New York representative is openly working on a bill to force those campuses to change how they handle their riches.
legislation that would require colleges with large endowments to spend a minimum portion of their endowment earnings on grants to students.
There’s no bill publicly available yet, so this is clearly early days in the sausage-making. The linked article does float some possible details:
a summary of Reed’s bill states that it would apply to schools with endowments over $1 billion and require at least 25 percent of endowment earnings to be spent on grants. If an endowment were non-compliant for three years, tax-exempt status would be lost.
The legislation might also require that donors to college endowments designate at least 25 percent of their contributions to tuition-relief grants before they can claim a tax deduction.
On his official education page we find similar language from Reed:
Specifically, we are working to hold colleges accountable and ensure that they are using their endowments to offer direct student aid to students from working and middle class families to help them afford college.
Note the class language there, which is powerful in upstate NY, not to mention nationally.
Reed’s a Republican, and seems aligned with other Republican Congresscritters this year on the endowments issue. Let’s see if the drive remains partisan, or if Democrats join in.