House panel to examine tax-exempt college endowments

House panel to examine tax-exempt college endowments
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The House Ways and Means Committee's oversight subcommittee is slated to hold a hearing next week on tax-exempt college endowments.

Lawmakers have been scrutinizing endowments given the rising costs of higher education. The endowments of private, nonprofit colleges are tax-exempt, and the schools are not required to spend a minimum percent of their endowments annually.

The hearing, scheduled for Sept. 13, comes after top House and Senate GOP tax-writers sent letters earlier this year to private colleges with endowments over $1 billion, asking for information about the funds.

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Witnesses at the hearing will include representatives for colleges as well as other experts, according to a news release.

“The Ways and Means Oversight Subcommittee Members are deeply concerned that college tuition is spiraling out of control, making higher education out of reach for American families, even when most colleges and universities enjoy significant tax benefits," said Rep. Peter Roskam (R-Ill.), chairman of the subcommittee.

"We look forward to learning about creative measures some institutions are taking to reduce costs for students, as well as to hearing about various tax policy proposals that could affect colleges and universities.”

Rep. Tom Reed (R-N.Y.), a member of the subcommittee, has been working on a proposal that would require schools with large endowments to spend a minimum percent of their endowment earnings on grants to students.

Higher education institutions have said that colleges are limited in how they can spend their endowments because of donor restrictions and already work hard to make tuition affordable.