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US universities have launched a fierce last-minute lobbying campaign against a proposed tax increase in Donald Trump’s “big, beautiful bill” ahead of its expected approval by the Senate in the coming weeks.
The proposal in the president’s signature fiscal legislation calls for taxes on university income from endowment investments to jump from 1.4 per cent to up to 21 per cent, depending on the size of the fund and student body.
A group of elite universities, including Harvard and Princeton, are lobbying for this to be changed to a requirement to spend 5 per cent of their endowment value annually. That would bring them into line with rules private foundations follow for maintaining their tax-free status.
Liz Clark, vice-president at the National Association of College and University Business Officers, said: “Rather than siphoning away funds in a tax, this alternative would help support student aid, education, and research. It promotes the active use of funds and will reward prudent financial management.”
Universities invest their endowment assets and use some of the proceeds to fund operations, including professor salaries, financial aid, student fellowships and campus activities.
For some, such as Harvard, which has a $53bn fund, investment returns are the single-largest source of funding for the school, representing more than a third of revenue.
The government’s tax increase would raise $6.7bn over a decade, according to the Joint Committee on Taxation. It is one of a wide range of measures the Trump administration has levelled against top US universities this year in what it claims is an attempt to combat antisemitism and liberal bias. It has slashed budgets, suspended visas for foreign students and threatened to withdraw their accreditation.
Harvard has been under particular pressure, and has sued the government to block some of the measures.
In response it and other institutions have invested heavily in lobbying against the new tax.
In the first quarter of this year, lobbying expenses among the top 100 universities surged past $10mn, according to a Financial Times analysis of disclosure filings — a roughly 31 per cent increase from the same period last year, before Trump entered office.
Ivy League schools have been among the biggest spenders and have been lobbying around funding, financial aid and endowments.
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The figures are likely an underestimate. Jeff Miller, a top lobbyist at Miller Strategies has registered to lobby for Cornell, Johns Hopkins and Northwestern in the first quarter of this year but he has yet to disclose his fees for those clients.
Harvard reported it had spent $340,000 in combined in-house and outside lobbying in the first quarter, up from $160,000 in the same period in 2024. The university has hired Ballard Partners, another top lobbying firm with ties to the White House, to help advocate its interests.
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Columbia more than doubled its lobbying in the first quarter of this year to $520,000, while Yale spent $280,000, up 56 per cent on the previous year.
It is unclear whether the spending will bear fruit.
“There will be a tax,” said Louisiana Republican senator John Kennedy. “I just don’t know the amount, whether it will be phased in and what some of the terms and conditions will be.”
Another Republican senator, James Lankford of Oklahoma, said he “absolutely” would like to see changes to the tax proposal, but did not say what they should be. “There are about 25 options out there,” he said.
