Swarthmore College is now exempt from paying a federal excise tax on its endowment earnings under the new conditions of Trump’s budget bill.
The law raised taxes on colleges with the largest endowments but exempted colleges with fewer than 3,000 students, writes Susan Snyder for The Philadelphia Inquirer.
Swarthmore, a small private college, has 1,730 students.
The college had been paying an annual 1.4 percent tax on its $2.7 billion endowment since 2017, about $2 million in fiscal year 2024.
Swarthmore, Bryn Mawr, and Haverford Colleges joined a coalition of 25 small private liberal arts colleges nationwide advocating for the exemption because of the impact the tax would have on their operations.
Endowment earnings pay for financial aid for students, research, endowed professorships, and other programs. At Swarthmore, endowments cover more than half of its $220 million budget.
“I am grateful that members of Congress recognize the vital role endowments play here and at small colleges across the country,” said Swarthmore President Valerie Smith.
Swarthmore College enacted a three-month budget for the new fiscal year, uncertain what impact proposed new endowment taxes would have. Now the board will return to regular budget discussions in September.
Read more about the exemption impact at Swarthmore College in The Philadelphia Inquirer.
