Three TN colleges would face new federal endowment tax under U.S. House GOP proposal

Three institutions in Tennessee – Vanderbilt University in Nashville, the University of the South at Sewanee and Rhodes College of Memphis – would see their endowments subject to a new federal tax under the tax code rewrite proposed by U.S. House Republicans last week, according to the Chronicle of Higher Education.

Deep within the plan… is the language that spells out which institutions would be affected. The bottom line: Only the most-affluent colleges need worry. Colleges would be subject to the tax, set at 1.4 percent of net investment income, only if their endowment assets total at least $100,000 per student.

There are further caveats. We’re talking about just private institutions here; public colleges and universities would be exempt. Institutions with fewer than 500 students would be exempt, too.

How many colleges does that leave? About 140, according to a Chronicle analysis. We took the 2014 end-of-year endowment numbers at private colleges that met the enrollment threshold, and checked them against their 2015 enrollment figures, counting all full-time students. Below you’ll find a list of the 200 institutions with the most assets per student.

There’s a bit of wiggle room in the numbers: The House proposal targets endowments valued at “$100,000 per full-time student” without specifying whether all for-credit students or just undergraduates would be counted, for example.

The Chronicle listing of impacted schools includes three in Tennessee.

Vanderbilt is reported as having a $4 billion endowment with 11,807 students for a average of $342,699 per student.

Sewanee is reported as having a $374 million endowment with 1,759 students for an average of $212,792 per student.

Rhodes is listed as having a $335 million endowment and 2,049 students for an average of $163,533 per student.

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