How The Big Beautiful Bill Would Push Colleges To Educate Americans, Not Foreigners

The “Big, Beautiful Bill,” backed by President Donald Trump, fulfills one of Republicans’ most provocative promises: to tax universities with massive endowments. The tax would help reduce the United States deficit by taxing multibillion dollar institutions of privilege as if they were hedge funds with classrooms attached — which critics say institutions like Harvard are.

The version of the bill passed by the House would institute hefty taxes on “net investment income” for universities with the largest endowments, topping out at 21% for colleges with endowments equivalent to more than $2 million per student. Colleges with endowments less than $500,000 per student wouldn’t be taxed, while those with endowments between $500,000 and $750,000 per student would be taxed 1.4%, with two other rates in between.

But the language is not just designed to punish colleges that Republicans say have become liberal political organizations; it is written in a way that could benefit Americans by significantly increasing the slots available at high-level universities for citizens, rather than foreigners.

The calculation of endowment per student counts only students from the United States. So, one of the ways colleges can avoid taxes is by ensuring that more of their slots go to Americans. If a college has a $1 billion endowment and 1,000 students, that works out to $1 million per student, which would fall under a 7% tax rate. But if half of those students are foreigners, the rate would actually be based on dividing $1 billion by 500 students, resulting in a $2 million figure — and a much higher tax rate.

In some ways, the massive flow of foreigners to American colleges mirrors the surge in immigrants crossing the southern border. According to Open Doors, which tracks international scholarship, more than 1.1 million foreigners studied at American colleges in the 2023-24 school year, up 7% from the previous year. The number of foreign graduate students was at “an all-time high,” it said, at 500,000. Most of the students came from India and China, and the highest growth rate came from sub-Saharan Africa.

The group said New York University had more than 27,000 international students, while Northeastern University had 21,000 and Columbia had 20,000. According to Reuters, 42% of students at Carnegie Mellon were foreign, while the rate was 39% at Northeastern and Columbia, and 34% at NYU.

Universities say they prefer to admit foreign students because they are often wealthy people paying full tuition, and their progressive tuition model relies on charging high prices for some to subsidize financial aid for poor people.

But Republicans say that makes it more difficult for Americans to gain admittance to American schools at all, and that colleges get preferential tax treatment and significant government funding on the premise that they are educating American taxpayers.

Open Doors said that 55% of the foreign students pay for school using foreign money, typically from their family, while 41% are funded with money from the United States. In half of those cases, the money comes from the colleges, often through “federal government research grants disbursed to the student through the institution,” it said.

Republicans also say using American universities to train and conduct research by foreigners poses national security concerns. A common way that people begin residing illegally in the country is by coming on a student visa, and then never leaving when it expires. Mohammad K. Dabous of Jordan, for example, was arrested for allegedly ramming a truck through the gates of the Quantico military base after overstaying a student visa.

Giving foreigners, instead of Americans, a significant number of slots at elite institutions also leads to the argument that we need high immigration to staff the country with doctors and engineers, because there aren’t enough Americans with the necessary training.

The percentage of foreign students at some universities has become so high that instead of the American way of life rubbing off on a few visitors, antisemitism and third-world blood feuds have become a part of a dominant culture. Columbia, with its sizable international population, was at the epicenter of anti-Israel and anti-Western unrest, with Muslim immigrants radicalizing privileged Western leftists.

The “Big, Beautiful Bill,” which awaits passage by the Senate, would also overhaul how student loans are administered, forcing colleges to eat the costs of bad bets when students can’t pay their loans—in turn putting pressure on colleges to lower tuition, admit only qualified students, and deemphasize useless majors.

Related: U.S. Diplomat Training Ground Let Antisemites Take Over Its Faculty, Lawsuit Says