Higher Education Accountability Tax Act

This bill raises the tax on investment income for private colleges and universities from 1.4% to 10% and adds a 20% rate for institutions whose tuition increases outpace inflation (defined as exceeding the Consumer Price Index over a 3-year period for all first-time, full-time undergraduates). It lowers the income threshold triggering the tax from $500,000 to $250,000, expanding the number of schools subject to the tax. The changes apply to taxable years beginning after December 31, 2024. The bill directly affects private higher education institutions with significant investment income, particularly those increasing tuition faster than inflation.