Dartmouth College’s president said proposals to hike endowment taxes threaten the school’s research capabilities and its ability to enroll the best students.
In an interview in Hong Kong with Bloomberg News on March 25, Sian Leah Beilock said she’s been to Washington three times to talk to the Ivy League school’s elected representatives about the impact of such a tax raise.
Republicans are targeting billions of dollars by raising taxes on investment returns at elite university endowment funds. Private colleges with at least $500,000 per student are under particular scrutiny. Dartmouth’s endowment stood at $8.3 billion as of June, with annualized returns of 9.4% over 10 years.
Colleges are mobilizing to defeat the tax increases, with some hiring lobbying firms and meeting with lawmakers to argue that higher taxes will harm the neediest students.
One bill suggests raising the levy to as much as 21% from a current 1.4%. Another risk for schools is that the tax could be expanded by lowering the threshold to endowments with $250,000 per student, or even less.
“My hope is that it doesn’t increase substantially because I think it hurts our ability to be a great research university and hurts our ability to bring the best students to campus,” said Beilock.
Dartmouth, based in New Hampshire, operates differently from many of its peers, she said. The school provides financial support based on those who need it equally across domestic and international students, and doesn’t depend on foreign enrollment for revenue like some other universities.
Universities say the endowments help fund scholarships, and higher taxes will come at the expense of the neediest students.
About 14% of Dartmouth’s students are international, and the breakdown of those who pay versus those who use financial aid is comparable across the board, she added.
About a third of students qualify for free tuition and more than half receive financial aid. The average scholarship is over $70,000, and covers almost 80% of the cost of attendance.
