No. of Recommendations: 5
Iowa’s Grinnell College for years was in an enviable position. Bolstered by Warren Buffett’s guidance decades ago, the tiny liberal arts school has grown its endowment to $2.7 billion, helping fund one of the most generous financial-aid programs in the country. That success is now a problem.
The draft tax bill released by House Republicans this week proposes significantly raising taxes on private universities — with levies based not on the size of the endowment, but on the amount per pupil. That would hit not only the elite schools that have been under scrutiny by the Trump administration, but also smaller liberal arts colleges that rely on their endowments for student needs.
Lawmakers proposed a 21% tax rate for schools that have an endowment of at least $2 million per pupil, which includes universities such as Harvard, Yale and Princeton. The scale then slides to 14% for colleges with endowments totaling more $1.25 million per student. Both would be a sharp increase from the current rate of 1.4%.
Grinnell had an endowment of about $1.5 million per student in fiscal 2024. Schools such as Pennsylvania’s Swarthmore College and Pomona College in California are also at risk of having to pay more in taxes.
https://www.bloomberg.com/news/articles/2025-05-14...https://archive.ph/sFY2gI also read that the GOP bill would tax income of private foundations above a certain level of assets. This could impact Buffett’s family foundations. All the more reasons for them to oppose dividends.
