Ensures Only American Students are Counted Towards Endowment Tax Calculations
Follows Universities’ Failure to Protect Jewish Students
WASHINGTON — Today, Congressman Vern Buchanan, Vice Chairman of the House Ways and Means Committee, introduced the Protecting American Students Act to ensure that only American students are counted towards endowment tax calculations.
The bill amends the scope of the Endowment Tax calculation established under the 2017 Trump tax cuts to only account for students eligible for federal financial assistance under the Higher Education Act. This includes students who are citizens, nationals or permanent residents of the United States or who can provide evidence from the Immigration and Naturalization Service that they are in the country with the intention of becoming a citizen or permanent resident. The bill does not include students who are in the U.S. temporarily or on a student visa.
By excluding noncitizens from the calculation, this legislation would add approximately 10 to 12 schools to the list of schools that currently qualify, including schools like Columbia University and Cornell University, the sites of some of the largest pro-Hamas protests following the October 7 attacks.
“Our institutions of higher education should not be rewarded with generous tax benefits while they prioritize enrolling foreign students at the expense of hard-working American students,” said Buchanan. “Many of these so-called ‘elite’ schools also continue to condone pro-Hamas protests following the October 7th attacks that quickly devolve into instances of violence and hate speech. My bill makes it clear: enroll more American students or pay the price.”
Currently, the Endowment Tax is a 1.4 percent excise tax on the net investment income of a private college or university endowment above a certain size. To be within scope of the tax, the institution must have at least 500 “tuition-paying” students and an endowment value of at least $500,000 per “full-time” student. According to the IRS, in 2022, the Endowment Tax raised $244 million from 58 schools.
Buchanan’s bill will incentivize universities to either enroll more American students or spend more of their endowment funds on programs like student financial aid and new campus resources to avoid being subject to the Endowment Tax. This bill would not apply to any schools in Florida, as none currently meet criteria for applicability. This bill also does not target small schools; at this time, the additional schools required to pay the Endowment Tax all have extremely large endowments of at least $750 million.
Buchanan’s bill is cosponsored by fellow members of the House Ways and Means Committee: Reps. Mike Kelly (R-Pa.), Carol Miller (R-W.V.a.) Greg Murphy (R-N.C.), Adrian Smith (R-Neb.), Claudia Tenney (R-N.Y.), and Beth Van Duyne (R-Texas).
Buchanan has consistently advocated for American students and for ridding antisemitism from our schools. In November 2024, his VETS Credit Act 2.0, which expands eligibility for G.I. Bill benefits for student veterans, passed the U.S. House. In May 2020, President Trump signed the Buchanan-backed Never Again Education Act into law to dedicate funding for Holocaust education programs.
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