Trump’s ‘American Academy’ plans to tax private university endowments. Here’s what it means for Stanford.
As part of his 2024 election campaign, President-elect Donald Trump proposed the American Academy, a new, “strictly non-political” institution funded by taxes on large endowments of private universities including Stanford.
In a 2023 video published as part of Agenda47, Trump’s re-election manifesto, he announced plans to “take the billions and billions of dollars that we will collect by taxing, fining, and suing excessively large private university endowments” to create the “American Academy.”
In response to these plans, Stanford will remain “fully committed to providing substantial student financial aid to our students,” University spokesperson Dee Mostofi wrote in an email to The Daily.
“Research universities like Stanford are drivers of the innovation economy and are essential to US competitiveness,” Mostofi said. “To grow the nation’s competitive edge globally, new policies should focus on sustaining the nation’s strongest assets, including research universities.”
Morris P. Fiorina, political science professor and Hoover Institution senior fellow, believes the American Academy is “unlikely to emerge” as a political focus for the Trump administration.
“In terms of priorities, this would have to be pretty low down. I don’t think a Stanford endowment officer would be losing much sleep over this,” Fiorina said.
The American Academy would gather “the highest quality educational content, covering the full spectrum of human knowledge and skills, and make that material available to every American citizen online for free,” Trump said in November while announcing plans for the Academy. The Academy plans to compete directly with existing four-year universities by granting credit for past coursework at traditional institutions and awarding graduate students the equivalent of a bachelor’s degree, recognized by all federal contractors.
In light of recent political controversies within the nation’s top universities, such as the resigning of three Ivy League presidents due to controversies in handling the Gaza protests, Fiorina notes that many U.S. institutions “went through a really bad period last fall.”
“The sense that [universities] are not only not contributing, but they may be actually damaging the country, provides an opportunity for politicians on the other side to go after them,” Fiorina said.
Trump proposed the American Academy as “something dramatically different” to traditional U.S. universities, which he believes are turning students “into Communists and terrorists and sympathizers of many, many different dimensions.”
“Americans have been horrified to see students and faculty at Harvard and other once-respected universities expressing support for the savages and jihadists who attacked Israel,” Trump said in the Agenda47 video.
The president-elect emphasized the non-partisan nature of the academy in the Agenda47 video, stating that, “it will be strictly non-political, and there will be no wokeness or jihadism allowed.”
Colin Weis ’28, a member of Stanford Political Union’s executive committee, believes that this plan is a “classic political stunt” from Trump.
“His plan seems like a knee jerk reaction to the protest happening about the Israel-Palestine conflict,” Weis said. “I think it’s impossible that someone that polarizing, with a plan that is so impulsive could ever be neutral.”
The Academy is not Trump’s first attempt at taxing university endowments. In 2017, then-President Trump signed a bill that taxed 1.4% on the income of wealthy private university endowments.
Vice President-elect J.D. Vance previously proposed an act in 2023 to raise taxes on endowment investment income from 1.4% to 35% for private universities with at least $10 billion in assets.
“Right now, [universities] pay a tax that is less than 2 percent on their net income — far lower than many of the working-class members of my own family and far lower than most Americans pay in taxes,” Vance said in a 2023 speech to the Senate.
In May 2024, Vance also proposed the “Encampments or Endowments Act” amidst campus protests and encampments in response to the Israel-Hamas war. His plan would block federal financial assistance to colleges with encampments on their campuses and tax institutions up to 50% of its endowment assets if they failed to provide financial aid to enrolled students to make up for the federal aid lost.
“My legislation will force colleges to follow the law, protect their students, and shut these encampments down. If they refuse, they’ll pay a hefty price,” Vance wrote in a press release last May. “It’s time to end this national embarrassment.”
Trump is set to be inaugurated as president on Monday.
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