Eisgruber wrote that he will be spending more time in Washington in light of endowment funds being the “subject of worrisome taxation proposals” by congressional lawmakers.
“Rarely, if ever has it been so important for university presidents to speak up for higher education,” Eisgruber wrote. “It is also, of course, an unusually fraught time for university presidents to make statements.”
While endowments are among the institutional investors targeted by U.S. President Donald Trump’s executive orders, Eisgruber noted that his letter would not address those as “there is much that we do not yet know about their implications.”
While not calling out specific lawmakers in the letter, Eisgruber said he will discourage the passage of a bill — now in the House Ways and Means Committee — that would increase a federal endowment tax.
In 2017, Trump signed the Tax Cuts and Jobs Act, which imposed a 1.4% endowment tax for institutions with more than 500 students, and endowments exceeding $500,000 per student. In the letter, Eisgruber said the act “breached” an “American tradition” of exempting charitable endowments managed by nonprofit organizations.
More recently on Jan. 15, Rep. Troy Nehls, R-Texas, introduced the Endowment Tax Fairness Act, which would raise the endowment tax on “certain private university endowment profits” to 21%.
If a larger tax is imposed on endowments, it would “damage higher education and our country,” Eisgruber said.
“Endowments at America’s leading research universities support world-leading teaching and research programs that strengthen the nation’s economy and enhance its security,” he added. “If endowments are routinely subject to threats of confiscatory or punitive taxation, it’s much harder to make long-term commitments that depend on annual endowment spending, such as expanding financial aid or investing in emerging areas of science that are critical to the nation.”
And Eisgruber said he invites questions from lawmakers regarding institutions such as Princeton.
With the advancement of online communication methods such as email and social media, he noted there’s been increased opportunity and demand for academic leaders to make statements on current events. Traditionally, Princeton has exercised “institutional restraint” or neutrality in regard to issues such as strikes and divestment, and with the current polarized political environment, it “behooves us to be even more restrained in the future,” Eisgruber noted.
“The worst choice, however, would be to remain silent,” he added, calling for peers at other institutions to speak up for the value of “teaching, research and a college degree.”
“We need to describe and defend the vital, vibrant activity taking place on our campuses,” Eisgruber said. “We need to explain why diversity and inclusivity are essential to the excellence of our campus communities and the achievement of our educational mission.”
Upholding inclusion and belonging
Eisgruber did not address the executive orders pertaining to DEI. But he did commend Princeton’s initiatives to “ensure that talented faculty, students, and staff from all backgrounds can thrive.”
As part of the university’s efforts to promote socioeconomic diversity, Princeton’s trustees set a target in 2024 to have at least 70% of the undergraduate student body on student aid. Among the students who entered the university in the current academic year, over 71% are receiving financial aid — and 21% are eligible for Pell grants, which Eisgruber noted are given to students coming from lower-income households.
During the week ended Jan. 31, Princeton will release its annual diversity report, which the university has produced beginning with the 2020-2021 academic year.
The report will include information on whether students in the graduating class would recommend enrolling in the university to a high school senior of the “same background, ability, interests, and temperament,” Eisgruber added. Data broken down by categories including race, ethnicity and gender.
The president noted that the annual report “shows disparities in the student experience across demographic groups.” But while the data may provoke criticism from groups, he said it informs the work the university and other higher education institutes to enhance the inclusivity — such as hosting conversations on “difficult topics.”
“All of this will require hard conversations — but difficult discussions are essential to the defense of our mission and policies,” Eisgruber wrote. “They are also the core of what universities do: we insist that even the most sensitive topics be examined on the basis of facts and careful analysis.”