America
Elite Schools Face Big, New Taxes on Their Endowments
In battle to banish campus antisemitism and DEI, Trump ends subsidies that benefit rich.
T BY JOHN FUND
he joke that some uni- versity critics tell is that in addition to the two great lies — “I’m from the gov-
ernment and am here to help” and “The check is in the mail” — there is a third: that universities are not-for- profit organizations. That myth was part of the debate
over President Donald Trump’s “One Big Beautiful Bill.” In 2017 universities were already controversial, but mostly because their dramatic tuition hikes and the burdensome student loans that came with them were limiting access to higher education. Since then, those issues have
grown worse. But now, layered on top are
charges that universities have been tolerating antisemitism, discrimi- nating against white people and Asians, indoctrinating a generation of “woke” students, and have got- ten caught up in numerous scandals
involving everything from the mis- use of federal contracts to plagiarism on the part of top officials. So it should come as no surprise
that a minor provision in the 2017 tax bill from the first Trump term is being expanded dramatically in this year’s tax bill — taxing university endowments. In the 2017 tax bill, nonprofit
Dumber Kids, Bloated Faculties
I
t’s not as if universities are doing a great job. The percentage of college students who can read and
answer basic questions about a newspaper article has dropped from an already depressing 40% to 31%. Almost half of college graduates do not know basic facts about our system of government, and more than half cannot identify what the Bill of Rights is. Way too many college students imagine that the United States was the first to invent slavery in the history of the world.
14 NEWSMAX | JULY 2025
universities with more than 500 students and assets of more than $500,000 per attending student got slapped with a new 1.4% tax on their assets. In this year’s bill, the tax on investment income for some of the biggest endowments would rise to 21%, in line with the corporate income tax rate.
What universities have produced instead of literate
graduates is a slew of well-paid administrators. There has been a 60% increase in administrative positions in higher education just since the 1990s, which is 10 times the rate of growth of tenured faculty positions. And universities have gone on a building spree that the
Egyptian pharaohs would have envied, with ever-fancier facilities such as rock-climbing walls, gleaming student union centers, new sports facilities, and lazy rivers to float down in rafts. Indeed, universities have built 21 million new square feet
of construction in recent years, most of which does not meet state standards for minimum hours of “classroom use.”
LIBBY O’NEILL/GETTY IMAGES
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