Swarthmore College could be hit with a tax rate increase in its endowments from 1.4 percent to anywhere from 14 to 21 percent, writes Susan Snyder for The Philadelphia Inquirer.
The rate increase was approved by the U.S. House of Representatives and is now being considered by the U.S. Senate.
The impact would be devastating if the new rate is enacted, warns Rob Goldberg, vice president for finance and administration at Swarthmore College.
The new rate would jump the college’s costs from $2 million to potentially $20 to $30 million, forcing it to cut back its generous financial aid program, Goldberg said.
Half of the money spent from Swarthmore’s endowment each year goes to financial aid, a program that still offers grants rather than loans to students.
Swarthmore College is a highly selective school with about 1,730 students.
“This particular formulation that the House has passed … is pretty devastating to small colleges, and it would be pretty devastating to Swarthmore,” Goldberg said.
Swarthmore has joined a nationwide coalition of 25 small private liberal arts colleges to urge lawmakers to exempt small colleges with fewer than 5,000 students from the rate increase.
Find out more about how the tax rate hike would impact smaller colleges like Swarthmore College in The Philadelphia Inquirer.
