WASHINGTON, DC – Today, Congressman Dave Joyce (OH-14) introduced the Higher Education Accountability Tax Act (HEAT) Act. The legislation aims to hold wealthy, elite universities accountable for the role they have played in the student debt crisis and seeks to stop tuition increases incentivized by the President’s misguided student loan cancellation plan. Congresswoman Mayra Flores (TX-34) and Congressman Byron Donalds (FL-19) joined this important effort as original cosponsors.
“America’s elite universities are the silent beneficiaries of President Biden’s misguided student debt bailout,” said Rep. Joyce. “Transferring $600 billion in student loan debt from one group of Americans to another does nothing to make education more affordable. Instead, it incentivizes wealthy universities to continue driving up their tuition costs amid-record-breaking inflation. These institutions need to be held accountable for their role in our nation’s ballooning student debt. The HEAT Act does just that. I’m proud to stand up for the taxpayers the President left on the hook for unpaid student loans and will keep working until we’ve broken higher education’s vicious cycle of constant tuition increases.”
“Elite universities should not be profiting off our students and federal student loans. Instead of helping the next generation of professionals in America, they are harming them with increased costs and decades of payments,” said Rep. Flores. “Universities continue to increase their rates on the backs of students and taxpayers, it is time to get tuition costs under control.”
In the next academic year alone, the median increase in published tuition prices at America’s top 20 colleges will be 3.7%, resulting in a median sticker price for undergraduate tuition of $58,396. However, this is not a new trend. Data from the past 20 years shows that the average cost of tuition and fees for both private and public National Universities has risen significantly for both in-state and out-of-state students. Tuition and fees at private National Universities have jumped 134%. Out-of-state tuition and fees at public National Universities have risen 141% while in-state tuition and fees at public National Universities have grown the most, increasing a whopping 175%. In general, these increases are significantly outpacing inflation, as the total increase in the consumer price index inflation from July 2002 to July 2022 was 65%. These increases come amidst new data from the National Bureau of Economic Research that finds that colleges and universities with larger endowments are not more likely to reduce the list price of tuition, nor do they increase the fraction of students receiving institutional aid.
Specifically, the HEAT Act would:
- Increase the tax levied on annual university endowment profits from 1.4% to 10%.
- Increase the number of universities who must pay the tax, expanding the threshold to all private colleges and universities with an endowment valued at $250,000 per student (down from $500,000). Review of list of the 65 impacted colleges and universities here.
- Further increase the annual tax on eligible endowments to 20%, for universities and colleges that raise the net price of attendance above the rate of inflation over the preceding three years.