The bill passed last month by the U.S. House of Representatives could place one private university in Ohio in a higher tax bracket on its massive endowment.
Colleges were not subjected to taxes on their investment gains until the 2017 Tax Cuts and Jobs Act was passed during President Donald Trump’s first term. A 1.4% tax was added to colleges and universities with more than 500 enrolled students and endowments surpassing $500,000 per student.
According to USA Today, a new proposal tucked away in the One Big Beautiful Bill Act calls for schools with a per-student endowment of $2 million or more to pay 21%.
“The One, Big, Beautiful Bill puts Americans first and ends special interest giveaways to the wealthy and well-connected,” U.S. Rep. Jason Smith, chairman of the House Ways and Means Committee, said in a statement. “Woke universities that ignore antisemitism while amassing endowments that rival those of Fortune 500 companies will be taxed like corporations," he said.
“Non-profits abusing their tax-exempt status and operating like businesses will finally be taxed accordingly,” Smith added. “Billionaire sports team owners will no longer get a special tax break. It will push back on foreign countries who attempt to steal American tax dollars. And millions of illegal immigrants let in by Joe Biden will finally no longer be eligible for refundable tax credits and will start paying the American taxpayer back.”
While much of the national coverage has focused on Ivy League Schools like Harvard University, the proposal would include Denison University in Granville.
In a statement, Denison University told the Columbus Dispatch that its endowment is “the engine that makes a Denison education accessible to low—and middle-income families across Ohio.”
Denison's comments continued: “We meet the full financial need of every student we accept and work hard to graduate our students with as little debt as possible. The endowment also funds the work we are doing to launch students into jobs, often here in Ohio. As an anchor employer in Licking County, we also use our endowment to invest in our employees, with wages and benefits that strengthen families and our local economy.”
According to the Dispatch, Denison had 2,488 enrolled students for the 2024-25 school year. The newspaper reported that the university’s student-adjusted endowment under the current rules stands at about $418,000.
However, the new rules would calculate the endowment per student based on domestic students only, excluding international students.
The Columbus newspaper reported that international students account for approximately 17% of Denison’s student body. If Denison did not include its international students in the formula, its endowment would increase to slightly more than $503,000, placing Denison into the lowest endowment tax bracket.
In a post on the Cato Institute’s website, Neal McCluskey, director of the Center for Educational Freedom, said the policy is the wrong approach.
“First, the tax system should never be used to punish people based on their political opinions,” McCluskey wrote. “But that is clearly what House Republicans are doing when they identify the targets of their tax as ‘woke.’ Punishing ideological adversaries might not be their only motivation—they might want new revenue or think college endowments get sweetheart tax treatment—but it is unquestionably a motive.
“Second, what about the sweetheart treatment possibility?” McCluskey added. “That seems dubious, at least relative to how nonprofits generally are taxed.”
Denison isn’t alone. Smaller liberal arts colleges, including DePauw University in Greencastle, Ind., could be hit with higher taxes on their endowments.
“A tax to the endowment directly impacts the amount of financial aid we’re able to give to students,” USA Today quoted Andrea Young, the college’s vice president for finance. “Instead of increasing access, we actually have the potential to decrease access for students with need.”
