By Melissa Nann Burke
The Detroit News
(TNS)
WASHINGTON ― A provision in the Senate Republicans’ version of the tax and budget bill that would have exempted Hillsdale College and others like it from a hike in the tax on private college and university endowments has been knocked out.
Democrats on the Senate Budget Committee confirmed on Friday that the Senate parliamentarian had concluded overnight that a section of the bill exempting a small number of religious schools, including the Christian liberal arts college in Hillsdale, violated the chamber’s procedural rules for the budget reconciliation process.
The House version of the One Big Beautiful Bill Act didn’t include the exclusion for Hillsdale.
The House version would have expanded the endowment tax from a flat 1.4% on the wealthiest private colleges to a four-tier system targeting private colleges with a top rate of 21% for schools with the highest per-student endowment values (21% is equal to the current corporate income rate).
GOP lawmakers said the proposal was holding accountable “woke, elite universities that operate more like major corporations.”
The Senate’s version of the legislation reduced the top rate for the endowment tax to 8% and added the carve-out for Hillsdale as part of the larger tax and border bill that is the cornerstone of President Donald Trump’s second-term agenda.
Hillsdale’s president had argued that it should not be subject to a federal tax on endowments because it doesn’t accept federal funding, and the tax would punish the school for its self-reliance and independence from the conditions that follow federal funding.
In an op-ed published last month, Hillsdale President Larry P. Arnn said the tax would encourage higher education institutions “to seek the shelter of government aid, where subsidies can offset tax burdens.”
“The revenue raised by taxing Hillsdale’s endowment would be negligible in the federal budget. But the damage done to our ability to serve our students, to maintain the independence of our faculty, and to carry forward our mission would be profound,” Arnn wrote.
“It would force us to cut resources, to limit opportunities, to pass burdens onto students and their families—all in the name of a fairness that is not fair.”
Politico this week noted that Hillsdale in April hired the firm Williams and Jensen to lobby on “specific threats to the institutional and financial independence of the college, primarily related to the higher education endowment tax,” according to a disclosure filing.
The college didn’t respond to requests for comment on Friday.
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©2025 The Detroit News. Visit detroitnews.com. Distributed by Tribune Content Agency LLC.
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