A small Maine college could take a big hit in the Trump administration’s broader assault on higher education.
If a new Republican-led tax increase on college endowments is passed in the U.S. Senate, Bowdoin College in Brunswick could be forced to pay millions more on its nearly $2.6 billion endowment — a tax hike that college officials say would be “punitive” and cut into its ability to offer financial aid and competitive pay for staff.
Bowdoin is the only Maine school likely to be affected by the tax increase, which is part of the larger piece of legislation known as the One Big Beautiful Bill Act that was narrowly approved by House Republicans.
Among other things, the law would increase the tax on endowments of certain private colleges and universities. According to a May 14 report by the House Ways and Means Committee, the tax hike is meant to hold “woke, elite universities that operate more like major corporations and other tax-exempt entities accountable, ensuring they can no longer abuse generous benefits provided through the tax code.”
According to an analysis by the New York Times, Bowdoin College’s endowment could be taxed at a rate of 14 percent, since it has an endowment of just under $2.6 billion in 2024, or $1.5 million per student. That would be up from the 1.4 percent it now pays on its endowment as a result of another Republican bill during Trump’s first term.
At least one other Maine school, Colby College, also pays that 1.4 percent tax, according to the New York Times. But the Waterville college said it does not anticipate the new bill will change that tax rate.
The tax proposal is a more recent part of Trump’s larger assault on higher education across the country. Beyond the administration’s high profile disputes with Ivy League schools such as Columbia and Harvard over funding and international students, it has also threatened or terminated $50 million in funding from the University of Maine system. Republicans in Congress previously went after Bowdoin with an investigation of its response to a student encampment in February against Israel’s war in Gaza.
Matthew Orlando, a senior vice president for finance and administration at Bowdoin, said its endowment supports 51 percent of its operations budget and 79 percent of the financial aid it gives to its students. It spends at least 5 percent of its endowment on these expenses every year.
“There is this misconception out there that colleges sit on their endowments and like to watch them grow, rather than use them to improve access and affordability or to improve programs,” Orlando said. “Bowdoin has consistently taken a 5 percent spending draw for decades. And all of it, every penny, goes to support the college’s mission in accordance with the terms signed by the original donors.”
The way an endowment fund works, Orlando said, is donors give a certain sum of money to a fund, and the college slowly takes money from that donation to support the programs and causes specified in the donor agreement. So, if a donor specifies that their donation is to be used for scholarships, it must be used for scholarships.
If the new proposal passes, Bowdoin would have to pay between $20 and 25 million in taxes on its endowment each year, according to Orlando. He said that tax would take away from the financial aid it gives to its students and payroll to its staff.
About half of Bowdoin’s students receive financial aid, Orlando said.
“There is no one profiting from it. This is not all the same as a corporation where profits are returned to shareholders or owners, and yet some want to tax it like a corporation,” Orlando said.
He added that the tax could have a chilling effect in the Brunswick area, where he noted Bowdoin is an “economic engine.” It hires construction workers and contractors. It sponsors local projects, such as outdoor classrooms for the Brunswick public schools.
“Projects will get deferred, delayed, initiatives will be put on hold,” Orlando said. “And that’s going to happen across the country at many college towns, and regions that have small colleges and large colleges.”
