Washington and Lee is hoping to influence Capitol Hill, hiring lobbying firm Holland & Knight LLP to push back against a Republican-backed plan to expand the endowment tax.
The university warns the proposal would disrupt its ability to meet the full financial need of students.
“Any increase to the endowment tax could have a devastating impact on W&L’s ability to provide direct financial support to low-income and middle-class students and families,” said Drewry Sackett, a spokesperson for the university, in an email to the Phi.
House Republicans proposed on May 12 increasing the current 1.4% endowment tax on private colleges to rates as high as 21%. The tax rate would depend on the size of the institution’s endowment, according to the proposed tax bill.
The 21% tax would apply to private colleges with endowments of more than $2 million per student. In 2024, W&L’s endowment per student was $900,099, according to the university’s financial statements. If the legislation passes, W&L will be required to pay a 7% endowment tax.
Sackett says the university’s decision to enlist a lobbying firm is aimed at protecting its endowment, which supports W&L’s need-blind admissions policy. The endowment guarantees families with household incomes below $150,000 pay no tuition, and those earning less than $75,000 pay no tuition, room or board, she said.
Lobbying disclosures show that between Jan. 1 and March 31, W&L paid Holland & Knight an estimated $60,000 for lobbying activities on its behalf. The move marks the first time the university has hired an outside lobbying firm.
Holland & Knight will help W&L make its case to lawmakers to oppose the proposed endowment tax hike.
The endowment tax proposal is part of a sweeping tax bill from the House Ways and Means Committee. To become a law, it would have to pass through the House’s slim GOP majority and then clear the Senate.
