Higher Education Accountability Tax Act

Increased tax rates on investment income: Section 2(a) increases the tax rate from 1.4 percent to 10 percent, and Section 2(b) allows for a 20 percent rate for certain institutions. This modifies how investment income is taxed for private colleges and universities.

Targeting institutions with rising costs: Section 2(b)(2) defines a "net-price-increase institution" as one where the net price increased faster than the Consumer Price Index over a three-year period. This provision targets institutions that have increased prices for all first-time, full-time undergraduate students.

Expanding the scope of the tax: Section 2(c) lowers the threshold from $500,000 to $250,000, which expands the range of institutions subject to the tax.

Higher tax burden on institutions: Section 2(a) and Section 2(b) significantly increase the excise tax rate on investment income, which could impact the financial standing of private colleges and universities.

Increased tax for specific schools: Section 2(b)(1) implements a 20 percent tax rate for institutions deemed "net-price-increase institutions," which applies to schools where the net price of students increased faster than the rate of inflation.

Broader application of the tax: Section 2(c) lowers the dollar threshold for institutions subject to the tax, meaning more institutions will fall under these tax requirements.