Today, Congressman Mike Lawler from New York’s 17th District introduced the Endowment Accountability Act. The bill aims to ensure that wealthy universities utilize their substantial endowments for student benefits and academic programs rather than accumulating funds.
“If these institutions aren’t using their resources to lower tuition, expand financial aid, and improve student services, then they should be paying their fair share. When profit is put above education, students lose,” stated Congressman Lawler. “The Endowment Accountability Act will encourage colleges and universities to invest in services for students and improve the quality of life on campus.”
In 2017, Congress established an endowment excise tax at a rate of 1.4% on endowment income for universities with at least $500,000 per student in endowment funds. This tax only applied to a limited number of institutions, excluding some wealthy universities like Columbia and Cornell that did not meet the threshold. Furthermore, the low tax rate was insufficient to significantly influence how universities allocate their resources.
Congressman Lawler’s proposed legislation seeks to address these issues by reducing the per-student endowment threshold from $500,000 to $200,000. This change would extend the tax coverage to more well-funded universities. Additionally, it proposes increasing the excise tax rate from 1.4% to 10% of endowment income, thereby providing a greater financial incentive for universities to direct their funds towards students and academic programs.
Congressman Mike Lawler is recognized as one of the most bipartisan members of Congress and represents an area just north of New York City encompassing Rockland, Putnam, Dutchess, and Westchester Counties.
