Institutions for higher learning have become a target of President Donald Trump’s second administration. The latest twist — a new university endowment tax.
In the nine months Trump has been in office, the administration has revoked visas of international students, rolled back diversity, equity and inclusion initiatives and cracked down on transgender athletes in women’s sports.
The administration has also cut billions of dollars in research funding for universities around the country, and Marquette has not been spared. In April, the National Institute of Health canceled $1.6 million in funding for the U-RISE program, which spanned across the Colleges of Arts & Sciences, Health Sciences and Engineering.
In July, the U.S. Department of Education canceled grant funding for the MKE Roots program. The program, which was run through the Center for Urban Research Teaching and Outreach, focused on implementing a local civics and history curriculum into Milwaukee classrooms, with a specific focus on marginalized communities.
In addition to executive actions, a new university endowment tax was passed earlier this year as part of Trump’s tax and spending package. The provision established a new multi-tiered endowment tax system, in which some of America’s wealthiest universities will now have to pay up to 8% in taxes on earnings made off endowment profits, a substantial increase from the previous 1.4% flat tax rate on schools whose endowments were worth more than $500,000 per student.
Sean Gissal, Chief Investment Officer at Marquette, said that this new tax does not apply to Marquette’s endowment. Since Marquette’s endowment is relatively small, it does not pay any taxes on earnings that come from transactions.
“The current minimum threshold to qualify for an endowment tax of 1.4% is $500,000 per student,” Gissal said in an email. “The Marquette endowment per student is under $100,000, so it is comfortably below even the lowest threshold to qualify for a tax.”
As of June 2025, Marquette’s endowment is worth approximately $1.13 billion. Here is how endowments generally work:
What are endowments?
An endowment is a permanent pool of donated assets that is invested by a non-profit institution, such as a university, to generate long term income. Most institutions of higher education have endowments in some way. An endowment is a pool of money that a university receives from various contributors. Most donations to endowments come with restrictions regarding where and how that specific funding can be spent.
Any funds that a university receives as part of an endowment are invested according to guidelines set by the board of trustees. Marquette reports its endowment is allocated as follows:
- 35% global equity (shares of stock from various international companies)
- 25% flexible capital (cash and other spendable assets)
- 20% private equity
- 12.5% real assets (buildings, other physical property)
- 7.5% fixed income
As of June, Gissal said Marquette’s endowment is worth $1.13 billion, with around $46 million available for the university to spend in the coming fiscal year. The remaining funding sits in various accounts where it grows in value as invested capital.
Which schools have to pay the new tax?
The new tax targets some of the country’s wealthiest and most exclusive universities, including Harvard University in Massachusetts, Yale University in Connecticut and Stanford University in California. All schools are reported to have endowments that are worth tens of billions of dollars.
This new tax means that wealthier schools will need to now pay hundreds of millions in new taxes on investment earnings. It is one of many ways that the Trump administration has used the power of the federal government to target academic institutions accused of promoting left wing ideologies on their campuses.
This story was written by Sahil Gupta. He can be reached at [email protected].
