• A new measure in the Senate GOP tax bill would exclude universities that do not take federal funding from a new excise tax on college endowments.
• Democrats attacked the provision as a special interest carve out because it appears to only benefit a single, conservative college.
• Republicans said it was a sensible change becuase schools that do not take federal funds should not be subject to a new federal tax.

Democrats on Friday slammed a provision in the latest version of the GOP tax bill that they said appeared to only benefit a single, conservative college but another change would have spared the school.

The provision would exempt any college or university that declines federal funding under Title IV from a new excise tax on university endowments. In the original version of the Republican bill, the Tax Cuts and Jobs Act (TCJA), any university with a large endowment would be subject to a new 1.4% excise tax.

Given that assumption Democrats say only one college, Hillsdale College in Michigan, has an endowment large enough to qualify for the excise tax and also refuses Title IV funding. Sen. Pat Toomey, who sponsored the language, acknowledged it would benefit the college.

But, another last-minute change in the TCJA would have exempted Hillsdale anyway. In the original Senate bill, the excise tax applied to schools with endowments larger than $US250,000 per student. A last-minute change increased that threshold to $US500,000 per student.

Hillsdale only has an endowment of just over $US360,000 per student, based on most recent enrollment and endowment reports.

Hillsdale College is well known for its conservative teaching and ideology. The school has also been subject to some controversy around its racial makeup. In 2013, Hillsdale President Larry Arnn said in a hearing before the Michigan legislature that the Michigan Department of Education sent a letter about the school’s diversity because the college “didn’t have enough dark ones.” Arnn later apologised.

Republicans defended the provision as reasonable since institutions that do not take federal funds should not be subject to new federal taxes.

Democrats said that the measure is simply a handout designed to help a school to which Republicans have connections, including Education Secretary Betsy DeVos.

A final vote on the TCJA is expected later Friday.

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