Private college endowments face higher tax to fund vocational training

What it does

This bill raises the federal excise tax on investment income earned by private colleges and universities from 8% to 15%, and directs the Treasury to transfer all revenue gained from this tax increase to fund career and technical education programs under the Carl D. Perkins Act. The higher tax on endowment earnings at wealthy private institutions is meant to redirect money toward vocational training and apprenticeships for working Americans.

Why we flagged it

The bill's operative mechanism is a straightforward tax increase on a specific asset class (private college endowment investment income) with a dedicated revenue stream to a named public program. It is a transparent policy choice, not a hidden rider or carve-out.

What the text implies

• The tax increase applies only to private colleges, not public universities or other tax-exempt entities with endowments (hospitals, foundations, think tanks), creating a sector-specific burden that may incentivize private colleges to restructure endowment management or reduce endowment-funded scholarships.
• The bill ties CTE funding to a variable revenue stream (the tax increase) rather than a fixed appropriation, meaning CTE programs face budget volatility if private college endowment investment returns fluctuate.
• Private colleges may respond by reducing endowment-funded financial aid, shifting costs to students or reducing institutional aid, which could offset the public benefit to lower-income students if those colleges serve significant numbers of them.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary citizens, particularly lower-income and working-class students, gain access to expanded career and technical education funding. Private colleges with large endowments face a higher tax burden on investment income, but this does not restrict their core operations—it only reduces the tax advantage on endowment growth. The revenue is explicitly dedicated to a public good (vocational training and apprenticeships), not general spending.

Who stands to gain

• Career and technical education programs (public)
• Community colleges and vocational schools receiving CTE funding

Named in the bill

Internal Revenue Code Section 4968, Carl D. Perkins Career and Technical Education Act of 2006, U.S. Department of the Treasury, Private colleges and universities, States (CTE program recipients)

Where it stands

• Jun 24, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Jun 24, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $216,377 in lobbying spend. A filing names 101 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 0% of bills with at least one filing.

Ashley Moody, the sponsor, reported $2,315,100 in PAC receipts in the 2026 cycle.

• Associated General Contractors of America — $216,377 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.