Tags: Tax | Elite | Colleges | Harvard

Tax Elite Colleges Like Harvard, Lawmakers Say

Image: Tax Elite Colleges Like Harvard, Lawmakers Say
Harvard University campus. (Photo by Joe Raedle/Getty Images)

By    |   Thursday, 05 May 2016 09:31 AM

Republican congressional leaders have asked 56 private colleges with endowments of more than $1 billion for details about holdings and naming rights for large donors.

A spokesman told The Wall Street Journal that the lawmakers want to make sure the schools, including Harvard, Yale, and Stanford, are using investment profits to serve their nonprofit missions.

"College costs have outpaced health-care inflation, and at the same time, there's this benefit for endowments," Illinois Rep. Peter Roskam said about the funds' tax-free status.

"I don't want to assert a conclusion," Roskam said, "but let's put this in the 'I'm just saying' category."

About two-dozen private schools hold around half of endowment money in the U.S. Those schools enroll 5 percent of the 20 million students in American colleges and universities, according to figures in the Journal.

Tuition and fees at public schools almost doubled in the last 15 years, and private school tuition rose 45 percent in that time.
 
The lawmakers' efforts point to concerns about increasing tuition costs. School endowments are generally treated as nonprofit tax-exempt organizations, usually used to fund faculty positions, student aid, and libraries.

The 10 largest endowments in the U.S. grew 80 percent over the past decade, to $185.3 billion. Taxing endowment profits would earn the U.S. government around $16.2 billion, according to the Journal.

Harvard president Drew Gilpin Faust said the tax exemption is "critical to Harvard's success and excellence,"reports Bloomberg.

But for some lawmakers, including GOP Sen. Chuck Grassley of Iowa, the endowments remain a concern.

"When colleges and universities are sitting on tax-exempt endowments valued in the billions of dollars, it makes sense to ask how these funds are being used to further their mission," Grassley said, according to the Journal.

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Republican congressional leaders have asked 56 private colleges with endowments of more than $1 billion for details about holdings and naming rights for large donors.
Tax, Elite, Colleges, Harvard
288
2016-31-05
Thursday, 05 May 2016 09:31 AM
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