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Trump criticizes colleges' tax-exempt endowments

Trump criticizes colleges' tax-exempt endowments

Donald TrumpDonald TrumpSt. Louis lawyer who pointed gun at Black Lives Matter protesters considering Senate run Chauvin found guilty as nation exhales US says Iran negotiations are 'positive' MORE is criticizing how colleges spend their tax-exempt endowments and pledging to ensure that schools don't get tax breaks unless they spend some of the money on students.

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"I'm going to work with Congress on reforms to make sure that if universities want access to all of these special federal tax breaks and tax dollars, paid for by you, that they are going to make good-faith efforts to reduce the cost of college and student debt and to spend their endowments on their students, rather than other things that don't matter," the GOP presidential nominee said in a speech in Chester Township, Pa., on Thursday

Trump devoted a portion of his speech to making college more affordable for students.

"These universities use the money to pay their administrators, or put donors' names on buildings, or just store the money, keep it and invest it. In fact, many universities spend more on private equity fund managers than on tuition programs. But they should be using the money on students for tuition, for student life and for student housing."

There are 94 U.S. public and private institutions with endowments over $1 billion, according to a 2015 survey of 812 college endowments and foundations from the National Association of College and University Business Officers and the Commonfund Institute.

Colleges say they already do a lot to make attendance affordable and that much of their endowments are restricted for specific purposes.

Colleges' tax-exempt endowments have also gotten attention from members of Congress. A subcommittee of the House Ways and Means Committee held a hearing on endowments earlier this month, and top GOP tax-writers sought information from private colleges with large endowments earlier this year.

Rep. Tom Reed (R-N.Y.), a member of the Ways and Means Committee, is developing legislation that would require colleges with large endowments to spend at least a certain percentage of their endowment earnings on grants to students. Endowments that were not compliant for several years could lose their tax-exempt status.

Democratic presidential nominee Hillary ClintonHillary Diane Rodham ClintonPelosi on power in DC: 'You have to seize it' Cuba readies for life without Castro Chelsea Clinton: Pics of Trump getting vaccinated would help him 'claim credit' MORE has proposed making college tuition-free for students who attend in-state public colleges and are from families that make no more than $125,000 per year.