Elite Universities’ Lobbying Spikes as GOP Eyes Tax Hikes

Ivy League colleges, elite universities and other higher education groups hiked spending on lobbying last year, as Republicans push to expand the taxes levied on their multibillion-dollar endowments.

Universities and others spent at least $8 million in 2024 lobbying Congress and administration officials on endowment tax and other issues, according to federal disclosures. Spending associated with filings that mentioned endowment-related issues, along with other topics, doubled from 2023, according to a Bloomberg Tax analysis.

The 2017 GOP tax law established a 1.4% tax on a limited number of universities, and Republicans now see increasing it as a way to raise an estimated $10 billion, and help offset extending that law.

The effort comes amid heightened bipartisan criticism over how universities handled complaints of antisemitism and Islamophobia since the Hamas attack on Israel in October 2023. Schools have been on defense at high-profile hearings in the GOP-led House, where lawmakers questioned their nonprofit status and valuable endowments.

“It’s a very difficult environment for higher education,” said Steven Bloom, assistant vice president for government relations at the American Council on Education. “And in a lot of ways, it is spilling over to considerations in the tax debate.”

The University of California, Cornell, Harvard, and Vanderbilt are among those that listed the university endowment tax or related bills, disclosures show. Other topics include benefits for veteran students, research initiatives, and immigration issues.

Boosting the endowment tax could push colleges to make tuition more affordable and provide better services, Republicans frustrated with universities reason.

“We have been looking at university endowments for quite some time,” said Rep. Beth Van Duyne (R-Texas) a member of the tax-writing House Ways and Means Committee.

Universities and their backers say higher levies on their endowments instead punish students by taking away funds that could be used for student aid and services.

Republicans in control of Congress are looking for ways to offset the estimated $4.6 trillion price tag to extend the GOP’s 2017 law for a decade. The party aims to do that quickly, and without Democrats’ help, through the filibuster-proof budget reconciliation process.

Ways and Means Chair Jason Smith (R-Mo.) floated hiking endowment taxes during a breakout session at an all-member House Republican meeting earlier this month

“There’s going to be some more discussion around that,” Rep. Ron Estes (R-Kan.), another Ways and Means member said of that conversation. “I don’t know that there’s a finalized plan.”

A New Tax

The 2017 law imposed the levy on the net investment income of university endowments, if the schools have more than 500 full time students and an endowment with a per-student value above $500,000. Fifty-six universities paid about $381 million in tax on their endowments in 2023, according to IRS data.

Republicans, including now-Vice President JD Vance, have since proposed upping the tax to 35%.Rep. Troy Nehls (R-Texas) introduced legislation in January to increase the rate to 21%, putting universities “on notice by holding them to the same tax standard” as the corporate rate. TCJA permanently slashed the corporate rate from 35% to 21%, though many of the individual provisions in the legislation expire at the end of 2025.

Republicans are considering several ways to expand the tax, according to a lengthy document with options for raising revenue or cutting spending the House Budget Committee circulated.

A 14% tax would bring in $10 billion over a decade, the document said. Excluding non-citizen students in the per-student value calculation would add a dozen more schools to the tax and raise roughly $275 million over 10 years, a Congressional Budget Office estimate said.

Confronting Criticism

The institutions argue that simply increasing the tax does nothing to address GOP concerns on university accountability or college affordability.

Some legislation simply targets entities they politically disagree with, clashing with the idea that legislation should be neutral, critics say. Vance’s bill, for instance, provided a carve-out for religious institutions.

Endowment funds are mainly used to benefit students and improve student services, ACE’s Bloom said. ACE spent about $289,000 in lobbying efforts in 2024, according to disclosures.

Upping the tax would hurt students more than help address GOP concerns, and that’s what the increased lobbying effort has sought to convey to lawmakers, he said.

“There’s these preconceived conceptions, inaccurate often, about endowments that form the basis for policy decisions that are ill-conceived and ultimately damaging,” Bloom said. “We’ve been trying to educate them and we’ll continue to try to educate them—I hope they are educable.”