Congress targets college endowments with tenfold tax hike
H.R. 1128 — Endowment Accountability Act · Filed by Michael Lawler (R-NY) · Introduced Feb 7, 2025 · Referred to committee
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What it does
This bill increases the federal excise tax on investment income earned by private colleges and universities from 1.4% to 10%, and lowers the asset threshold that triggers the tax from $500,000 per student to $200,000 per student. The effect is to tax more colleges' endowments at a much higher rate, raising federal revenue from institutions with large investment portfolios.
Why we flagged it
The bill's sole operative mechanism is a tenfold increase in the excise tax rate on college endowment investment income and a lowering of the asset threshold that triggers it. This is a direct revenue-raising measure targeting a specific class of institutions.
What the text implies
- Colleges may reduce financial aid or merit scholarships funded from endowment returns, shifting costs to students and families and potentially reducing access for lower-income applicants.
- Smaller private colleges with endowments near the new $200k-per-student threshold may face sudden tax liability, potentially forcing program cuts or institutional consolidation.
- The 10% tax rate may incentivize colleges to spend down endowments faster or shift investment strategies away from long-term growth, affecting intergenerational funding models.
- Public colleges and universities are exempt from this tax; the bill may widen the competitive funding gap between public and private higher education.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill raises revenue from wealthy institutions' endowments, which could fund public services or reduce deficits—a public benefit. However, colleges may respond by reducing financial aid, cutting programs, or raising tuition on students, shifting costs to families and potentially harming educational access and affordability for ordinary people.
Who stands to gain
- U.S. federal government (increased excise tax revenue)
Named in the bill
Internal Revenue Code of 1986, Section 4968, private colleges and universities, U.S. Department of the Treasury
Where it stands
- Feb 7, 2025 — Introduced · Congress.gov: “Introduced in House”
- Feb 7, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 2 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $380,000 in lobbying spend. A filing names 18 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Michael Lawler, the sponsor, reported $2,081,571 in PAC receipts in the 2026 cycle.
- Cornell University — $360,000 on 1 filing
- Southern Methodist University — $20,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (617 characters) on Aug 29, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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