U.S. Senate Majority Leader Mitch McConnell (R-KY) announced today that he was successful in securing a provision to protect Berea College in the Bipartisan Budget Act. The measure, supported by Congressman Andy Barr (KY-06), would exempt Berea College from an excise tax imposed on large private college endowments, ensuring the college will be able to continue its mission of providing a tuition-free education to low-income students. The Bipartisan Budget Act passed the Senate and the House of Representatives and was signed into law by President Trump.
In December during debate on the Tax Cuts and Jobs Act, every Senate Democrat voted in favor of a procedural motion raised by Senator Bernie Sanders to impose a tax on Berea College’s endowment, which would have cost the school about $1 million per year. A tax of this size would have reduced the number of students the school is able to serve. Today, with the passage of the Bipartisan Budget Act, Senator McConnell’s provision successfully reversed the Democrats’ tax on Berea. This provision would restore language that exempts schools with fewer than 500 tuition-paying students from the endowment tax – the same provision that Senate Democrats stripped at the last minute from the Tax Cuts and Jobs Act.
“After Senate Democrats’ removed Berea’s protection, I made a promise to help the students and the school,” said Senator McConnell. “In the recent Bipartisan Budget Act, Congress passed my measure to protect Berea’s students and allow the college to continue offering scholarships to more than 1,600 young people, many of whom are Kentuckians, and who have limited economic resources. I am proud to have worked with my colleagues, especially Congressman Andy Barr, to fulfill my commitment to these students.”
“We at Berea College are very pleased that the Bipartisan Budget Act passed by Congress includes language restoring the exemption from the new endowment excise tax for schools with fewer than 500 tuition-paying students,” said Dr. Lyle Roelofs, President of Berea College. “We are thrilled the bill passed, not only for the direction it provides for the federal budget, but also for this relief for colleges that use their endowment to provide access to higher education. At Berea, none of our 1600 students pay tuition, and we are grateful for Senator McConnell and Congressman Barr’s work to address this new tax liability, which would have forced us to scale back our mission of educating students who would not otherwise be able to attain a college degree.”