A Republican congressman is planning to introduce a bill this session that will make the country’s richest colleges very unhappy.
The proposal, authored by New York representative Tom Reed, would require universities with endowments of more than $1 billion to devote one-quarter of the endowment income each year to financial aid, according to Bloomberg, which got a first look at the draft. Universities that fail to comply for three years in a row could lose their tax-exempt status.
Reed’s proposal is designed to address the growing national problem of college affordability, where public university tuition has increased by more than a quarter since the recession, and private, non-profit four-year colleges have hiked their tuitions by around 20% on average in the same time period.
“The initial response has been very aggressive,” Reed said in an interview with Bloomberg. “I anticipate the conversation to get louder and louder. The issue isn’t going away.” So far, Reed’s bill has no co-authors.