PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
Version 00 · Introduced in House · Feb 5, 2025
Higher Education Accountability Tax Act
This bill increases the excise tax on the net investment income of certain private university and college endowments and expands the number of universities and colleges that are subject to the excise tax.
Under current law, certain private universities and colleges with 500 or more tuition-paying students (of which more than 50% are located in the United States) and endowment assets of at least $500,000 per student (per student threshold) pay an excise tax in the amount of 1.4% on the net investment income from such endowments. Endowment assets that are used directly in carrying out the institution's tax-exempt educational purpose are excluded from the tax.
Showing the opening paragraphs of the official summary.
The bill increases the amount of the excise tax to (1) 10% of the net investment income from a university and college endowment, or (2) 20% of the net investment income from a university and college endowment maintained by an institution that increases tuition over a three-year period (preceding the current tax year) at a rate that is higher than the inflation rate.
Under the bill, the tuition price for purposes of determining whether the 20% excise tax rate applies is the average yearly price charged to all first-time, full-time undergraduate students (including students who receive financial aid).
Further, the bill expands the number of universities and colleges subject to the excise tax by lowering the per student threshold to $250,000.
People & committees
Rep. Joyce, David P. [R-OH-14] · R–OH
Legislative record
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Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: May 6, 2026. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-02-05 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
This bill would increase the tax on investment income for private colleges and universities covered by the existing tax law. A higher rate would apply when an institution’s student-price measure, called “net price,” rises faster than inflation. It would also lower a dollar threshold used to determine which institutions face the tax.
Modification of excise tax on investment income of private colleges and universities (a) Increase in rate of tax Section 4968(a) of the Internal Revenue Code of 1986 is amended by striking 1.4 percent and inserting 10 percent.
is amended by inserting (20 percent in the case of a net-price-increase institution) after 10 percent.
the net price of such institution increased at a rate which exceeds the rate of increase in the Consumer Price Index (as defined in section 1(f)(5)) for such period.
(c) Expansion of institutions subject to tax Section 4968(b)(1)(D) of such Code is amended by striking $500,000 and inserting $250,000.
The bill would replace the existing 1.4 percent tax rate in Internal Revenue Code section 4968(a) with a 10 percent rate.
(a) Increase in rate of tax Section 4968(a) of the Internal Revenue Code of 1986 is amended by striking 1.4 percent and inserting 10 percent.
Covered institutions meeting the bill’s net-price-increase test would instead face a 20 percent rate.
(b) Additional increase in rate of tax for institutions with increases in net price (1) In general Section 4968(a) of such Code, as amended by subsection (a), is amended by inserting (20 percent in the case of a net-price-increase institution) after 10 percent.
For each tax year, the higher-rate test would compare the institution’s net-price growth over the preceding three tax years with growth in the Consumer Price Index, an inflation measure, over that same period. Net-price growth would have to exceed index growth.
The term net-price-increase institution means any applicable educational institution for any taxable year if, during the 3-taxable-year period ending with the taxable year immediately preceding such taxable year, the net price of such institution increased at a rate which exceeds the rate of increase in the Consumer Price Index (as defined in section 1(f)(5)) for such period.
The bill would use a definition of net price from another statute, modified to include all first-time, full-time undergraduate students, including those who do not receive student aid. The supplied text does not reproduce the underlying calculation.
For purposes of the preceding sentence, the term net price has the meaning given such term by section 132(a)(3) of the Higher Education Act of 1986 (20 U.S.C. 1015a(a)(3)) except that such price shall be determined by taking into account all first-time, full-time undergraduate students at the institution (in addition to such students who receive student aid).
To expand which institutions are subject to the tax, the bill would replace $500,000 with $250,000 in section 4968(b)(1)(D). The supplied text does not reproduce that provision’s threshold calculation or other eligibility requirements.
(c) Expansion of institutions subject to tax Section 4968(b)(1)(D) of such Code is amended by striking $500,000 and inserting $250,000.
The proposed changes would apply to tax years beginning after December 31, 2024.
(d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024.
The supplied action snapshot dated May 6, 2026, records introduction in the House and referral to the House Committee on Ways and Means on February 5, 2025.
Source snapshot updated 2026-05-06T18:20:50Z. 2025-02-05: Referred to the House Committee on Ways and Means. 2025-02-05: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-02-05. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or appropriations policy rider was identified in the complete supplied introduced text. This conclusion is limited to that version and does not establish the content of other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion is limited to that version; accompanying disclosure and report materials are unavailable.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
None identified in the reviewed text
No materially narrow preferential benefit, special exemption, or carve-out was identified in the complete supplied introduced text. This conclusion does not extend to other versions or accompanying materials.
Full text preserved for this analysis. Legislative record snapshot: May 6, 2026. How PlainBill uses AI