President Alison Byerly publishes op-ed in Washington Post

Byerly published an opinion piece titled, “Taxing college endowments hurts students in need.”

31 January 2025 Posted In:
Willis Hall on a sunny day.

Carleton president Alison Byerly published an opinion piece in The Washington Post titled, “Taxing college endowments hurts students in need.” She argues that raising the levy on endowments would result in less financial aid available for students.

When you hear the term “college endowment,” you might picture Harvard, Yale, or Stanford, institutions with endowments in the tens of billions. When a few dozen private colleges and universities became subject to a 1.4 percent tax on their endowments for the first time in 2017, there was not much sympathy for them. Today, 17 separate bills in Congress propose expanding the tax to a larger number of institutions or increasing the amount dramatically — by up to 35 percent in a December proposal from Vice President-elect JD Vance.

I am the president of a small, highly selective liberal arts college that does not have a business school, a law school or big-time sports facilities. Our football field has a bad habit of flooding whenever the nearby Cannon River rises, and the sport for which Carleton is best known is ultimate frisbee. Our institutional culture contains a strong current of Midwestern thriftiness. When we converted our entire campus to geothermal heating in 2021, reducing our energy use by 46 percent, the decision not only reflected our commitment to sustainability, it made good business sense.

We do have a $1.2 billion endowment that is subject to the current 1.4 percent tax on net investment income, which applies to colleges with an endowment of more than $500,000 per student. This now costs us more than $1 million annually, the equivalent of 10 full scholarships. Endowments are what allow Harvard, Yale, other major universities, and a number of liberal arts colleges such as mine to offer generous financial aid. At Carleton, we meet the full need of all admitted students, with 54 percent of our students currently receiving such aid. Any significant increase to the endowment tax would have a devastating effect on our ability to support students from low-income and middle-class families.

Read the full piece with a Washington Post subscription.