When the United States Congress proposed a dramatic increase to the federal endowment tax earlier this year, Grinnell College faced a cost of $30 million annually, significantly higher than the $2.4 million they paid in 2025. President Anne Harris and the administrative staff worked for months to coordinate lobbying efforts in order to halt the tax raise, which proved to be successful. The college not only avoided the tax increase but secured an endowment tax exemption.
Any college with fewer than 3,000 tuition-paying students will be exempt from the tax. While the college does have to finish paying taxes from the previous year, they will not pay any endowment tax starting 2026.
Harris said that the College has been monitoring the endowment tax since it began in 2017. After the introduction of H.R.1, or the One Big Beautiful Bill Act, on May 22, the college administration learned that the endowment tax would be increased from 1.4 percent to 21 percent on the realized gains of the endowment. Both Harris and Myrna Hernández, chief of staff and vice president of administration, were contacted by the Small College Coalition, a group of small private liberal arts colleges who educate legislators from across the country.
“Higher ed working together is a great thing,” said Harris. “It was really at that point that I would say a concerted effort of multiple colleges came together.”
The Small College Coalition met monthly and had weekly group meetings for the executive committee, which Hernández sat on.
This effort was built into direct advocacy on Capitol Hill, where Harris and other administrative staff met with legislators in the House, including Sen. Charles Grassley, who is the senior member of the Senate Finance Committee, and Rep. Randy Feenstra, who sits on the House Ways and Means Committee.
The College’s endowment allows it to practice need blind admissions and meet 100 percent of students’ demonstrated needs without loans. Harris said that less than twenty institutions provide all three. According to the 2024 National Association of College and University Business Officers (NACUBO) U.S. Higher Education Endowment Report, 68 percent of Grinnell’s annual endowment distribution went toward financial aid awards, which is 26 percent higher than the national average. “Showing our financial aid commitment … was very persuasive, and that one came into being when Senator Grassley said to me, ‘Show me what you’re doing for the kids. Tell me what you’re doing for the kids’ and so we really did,” said Harris.
Ninety-three percent of Grinnell’s students receive some type of aid and 49 percent of those students fall into the high/very high need category. 33 percent of the students are receiving full tuition scholarships and seven percent of the students are receiving full tuition and room and board scholarships.
“I think the other thing that was persuasive, particularly among the representatives, was our community impact,” Hernández said. “You think about Grinnell, in a town of a little over 9000 people, and we have about 800 jobs here. So that impact on communities and folks in the state also resonated with them in ways that they weren’t really thinking about.”
Harris and Hernández said that lawmakers were shocked to learn about the College’s connection to the local community. The College has contributed $103.4 million to the Poweshiek County economy, contributed 940 jobs to the local economy, partners with local non-profits, and has a community grants program that supports health care, recreation and other local needs.
“We are a municipal partner in a way that larger institutions and larger cities don’t have to be and I think that was persuasive,” said Harris.
Even though the bill is signed, the advocacy for the College won’t stop, Harris said. “We will continue to advocate, to tell our story, to say what we’re doing with our endowment in much more public ways than we did before,” said Harris.
“I think we saw it before as internal budget allocation. It turns out it’s really a civic statement, what we do in the community and what we do for college access.”