Endowments’ tax issues have come up before. Senator Charles Grassley, a Republican from Iowa, said in a September 2007 Senate Finance committee hearing that he was concerned about endowment growth as college tuition continued to rise. Grassley later raised the idea that college endowments should pay 5 percent of their value each year, using the same rule for foundations.
While legislation was never introduced, several of the wealthiest colleges changed their financial aid policies, awarding grants that don’t need to be repaid instead of loans. The richest are often the most generous with aid.
Harvard, which has the largest endowment in higher education at $35.7 billion, doesn’t ask families who earn less than $65,000 to pay, and some families that make more than $200,000 receive aid. Harvard has included endowments in its lobbying efforts since at least 2014, according to disclosures.
“We report on issues that are under consideration in Congress or the executive branch that relate to the education and research mission of the university,” said David Cameron, a spokesman for Harvard. “Issues that relate to the endowment certainly fall into that category. Our efforts thus far have been to generally provide information and insight into the critical role endowments play in fulfilling our academic mission.”
This article was provided by Bloomberg News.