Good morning, and welcome to Friday, June 13. Brock Read wrote today’s Briefing. Julia Piper compiled Transitions. Get in touch: dailybriefing@chronicle.com.

Small colleges, big dollars

There’s a potent political argument behind Congress’s push to raise the excise tax on large college endowments: We’re only targeting the institutions with the deepest pockets — the ones that have been squirreling away their investment income instead of putting it to work. But even among those institutions, can distinctions be drawn between the haves and the have-somewhat-lesses?

The small liberal-arts colleges in line for tax hikes think so. They comprise nearly half of the 31 institutions that would fall into the top three endowment-tax tiers under the budget bill that recently passed from the House to the Senate. Their lobbying strategy is coming into focus, our Sarah Huddleston reports. It might be summed up thusly: “We’re not the same as Harvard.”

At the core of their message: “We spend more of our endowment income than you might think.” Research behemoths like Harvard, Yale, Stanford, and Northwestern Universities might draw between 20 and 40 percent of their operating budgets from endowment revenue, tapping into very small proportions of their investment earnings. But at small private colleges, the percentages can swell:

• Pomona College’s endowment revenue contributed 49 percent to its operating budget.
• Grinnell College’s investment earnings cover 60 percent of its operations. It could see its tax rate climb from 1.4 percent to 21 percent.
• Quotable: “Endowments are our primary source of revenue,” said Anne Harris, Grinnell’s president. “We don’t have a D-I athletic team. We don’t have a medical center. We don’t have billions of dollars of grants.”

The colleges say much of their endowment spending goes to financial aid — something politicians on both sides of the aisle claim to want:

• Sixty percent of Pomona’s financial-aid budget comes from its endowment.
• Two-thirds of students at Smith College receive financial aid, which is financed chiefly through endowment interest.
• Quotable: “Essentially, it is a tax on the students who most need aid,” said Stacey Schmeidel, a spokesperson for Wellesley College, which estimates that a jump to a 14-percent tax bracket would be equivalent to fully funding 325 students.

Small private colleges are also touting their outsize role as economic engines. Many of the colleges are located in rural areas. Their endowment returns trickle into those communities, they say, in the form of jobs, grants to local institutions, and subsidies that encourage students to spend money off campus.

The jockeying over the endowment tax is now at its most intense. The House bill set the terms of engagement by capturing small privates in its trawl net. Now, as the reconciliation process truly gets underway, a coalition of two dozen such institutions have only a short time to make the case that they’d be bycatch.

The coalition is floating alternatives that would soften the financial blow they face. Among the options they’re trying to put on the table: different tax rates for colleges with fewer than 5,000 students, carve-outs for religiously affiliated institutions, and tax breaks for institutions that spend heavily on financial aid.

The big question: It all hinges on the Senate, long seen as a possible check on the House’s most aggressive impulses. At least some Republican senators seem interested in softening the endowment-tax hikes, as Politico has reported. But those lawmakers aren’t just motivated by sticking it to the Ivies. They also need to find a way to pay for planned tax cuts. How will they thread the needle?

📱Read Sarah’s full report: Small Colleges Are Banding Together Against a Higher Endowment Tax. This Is Why.

Federal news

• Tax exemptions under threat: The Treasury Department is considering new rules that would revoke the tax-exempt status of colleges that consider race in admissions, scholarships, financial aid, and other programs. The revisions, drafted as new guidance to the Internal Revenue Service, could be implemented without congressional approval. President Trump and the treasury secretary, Scott Bessent, have said they plan to strip Harvard University of its tax exemption, though the revocation process could take years. (Bloomberg, The Chronicle)
• Russian scientist released: Kseniia Petrova, a Harvard researcher, was freed on bail from federal custody by a magistrate judge Thursday. Petrova had been detained for four months after failing to declare frog-embryo samples she had brought into the country from a work trip in France. The Trump administration is attempting to deport her and continues to prosecute her on felony smuggling charges. (The New York Times)
• Ed. Dept. was eager to outsource: As it fired a huge swath of its work force, the department reached agreements with other agencies to transfer services and even employees, court documents show. One deal would have sent billions of dollars to the Labor Department to oversee education grants; another would have detailed staff members to the Treasury Department to help run student-loan collections. Those plans have been on pause since a federal judge ordered the department to rehire employees laid off in March. (Politico, The Chronicle)
• Government climate site marked for death? Climate.gov, run by the National Oceanic and Atmospheric Administration, will soon stop publishing new material after the feds terminated contracts with the site’s writers and producers. (The Guardian)

Quick hits

• Lawsuit attacks legality of HSIs: The State of Tennessee has joined Students for Fair Admissions, the group that successfully sued to abolish race-conscious admissions, to argue that a federal program disbursing millions of dollars annually to Hispanic-serving institutions is discriminatory. The lawsuit contends that Tennessee’s public colleges have been unjustly shut out of federal funding because they do not meet a threshold of 25-percent Hispanic student enrollment. (The Chronicle)
• Funding showdown looms in Michigan: The state’s Republican-controlled House and its Democratic-controlled Senate are worlds apart in their budget plans for the state’s flagship and its largest land-grant university. The Senate’s budget would slightly increase appropriations for the University of Michigan at Ann Arbor to $373 million; the House’s plan would slash funding by a whopping 91 percent, to less than $31 million. Michigan State University would receive $409 million under the Senate’s plan, and just $89 million from the House’s. The two chambers have until July 1 to agree on a budget. (MLive)
• A call to arms on accreditation: Accreditors must do more to enforce high academic standards and identify innovative approaches that serve students and colleges, according to a set of “bipartisan principles for accreditation reform” issued by the right-leaning American Council of Trustees and Alumni and the centrist Third Way. The groups argued that accreditation has become “a bureaucratic practice that offers few tangible, institutional benefits.” (ACTA, Third Way)
• Tug of war over Wells College: Two alumni groups are battling to buy the institution in upstate New York, which shut down last year amid dwindling enrollment. One group, led by a former philosophy professor and running coach, has put in an $11-million bid to bring the college back to life; the other, led by an investment-adviser alumna, has offered $10 million with an escalation clause. (Bloomberg)
• Limestone’s closure leaves online students fuming: In April the South Carolina university told students to pay in advance for virtual summer courses. It initially said those courses would continue even as it shut down its brick-and-mortar offerings. But after a fund-raising effort failed, the college reversed course and canceled the online classes, too. Six weeks later, students who paid say they haven’t received refunds. (South Carolina Daily Gazette)
• Ohio law fuels union dispute: A sweeping higher-ed overhaul signed into law in March has thrown a monkey wrench into collective bargaining at Central Ohio Technical College. The institution and its faculty union had reached a tentative agreement on a new contract earlier in the month, before the overhaul was signed. In light of the law, which calls for post-tenure review, prevents faculty from striking, and mandates “intellectual diversity,” the college’s president wants to come back to the bargaining table. Faculty say the institution has dragged its feet. (Inside Higher Ed)
• Undocumented students seek to challenge loss of in-state tuition: When the Department of Justice sued the State of Texas last week over a law granting in-state tuition to undocumented Texans, the state concurred and asked a judge to nullify it. Now a group of students are attempting to join the suit to argue that the law should stay on the books. (The Texas Tribune)
• Faculty handbook expurgates diversity: Missouri State University’s Board of Governors will vote tomorrow to approve revisions to the handbook, which include repeated deletions of the phrases “diversity” and “affirmative action.” (Springfield News-Leader)
• Iowa board bides its time on DEI: The state’s Board of Regents has postponed until July a vote on a proposal to prevent public universities from making any courses deemed to teach diversity, equity, and inclusion or critical race theory content a requirement. Objections from faculty unions and a Democratic state senator prompted the delay. (Iowa’s News Now)

Quote of the day

“We really do believe that DEI initiatives stifle speech.”

— Pano Kanelos, founding president of the University of Austin, said the start-up college’s social-media posts — including a video tease declaring that “DEI, ESG, and BS are out” and a message mocking course offerings at the University of Texas at Austin — do not violate its stance of institutional neutrality. Campus leaders have a “responsibility to speak” when political issues “intersect with the operations of the university,” Kanelos told The Chronicle’s Christa Dutton. “But I’m not going to make a comment about what’s happening in Ukraine, right?”

Read Christa’s full interview with Kanelos: One Year In, What Has ‘the Anti-Harvard’ University Accomplished?

Weekend reads

• Colleges Can’t Trust the Federal Government. What Now? (The Chronicle Review)
• How to Have ‘The Talk’ With Your Adviser (The Chronicle)
• Shattered Science: The Research Lost as Trump Targets NIH Funding (ProPublica)
• Authorship for Sale: Nature Investigates How Paper Mills Really Work (Nature)
• What Happens to Harvard If Trump Successfully Bars Its International Students? (The New York Times)
• A New Way to Help Some College Students: Zero Percent, No-Fee Loans (The Hechinger Report)
• Some Teens Are Ditching Traditional College for Vocational Schools (USA Today)
• U.S. Universities Are Moving to the Right. Will It Help Them Escape Trump’s Wrath? (The Guardian)

Transitions

• Jillian Trabulsi, chair of the department of health behavior and nutrition sciences at the University of Delaware, has been named interim dean of the College of Health Sciences. She will replace Bill Farquhar, who has been named interim provost.
• Lynda Goldstein, chancellor and chief academic officer at Pennsylvania State University-Wilkes-Barre, will retire at the end of the month.
• Dean Clark, vice president for enrollment at Gardner-Webb University, has been named vice president for enrollment management at Campbell University.
• David L. Unruh, senior vice president for institutional advancement at Drexel University, has been named vice president for university advancement at George Washington University.

To submit a new-hire announcement, email people@chronicle.com. You can also find Transitions online here.

Footnote

We reported briefly in yesterday’s Daily Briefing about the financial-exigency planning underway across the University of Minnesota system: Tuition hikes are on the table. Academic-program cuts seem unavoidable. Work-force reductions have been teased.

Add another casualty to the list: the Les Bolstad Golf Course. The system’s flagship Twin Cities campus has informed the Board of Regents — and city managers — that it plans to sell the 141-acre property, a mainstay of Saint Paul’s Falcon Heights suburb for nearly a century.

On the one hand, the planned sell-off is just one small data point in an escalating national trend. In an era of short-term budget crunches and longer-term fiscal uncertainty, myriad institutions are scrutinizing their land holdings, looking for high-upkeep, low-reward properties that can be turned into budget-balancing infusions of cash.

On the other hand, each of these decisions can leave a profound local impact. So it is with the Les Bolstad. It’s by no means a nationally renowned destination or a bucket-list course — though it was the site of the 1958 U.S. Junior Amateur Golf Championship, and Golf Digest says it “plays tougher than you might expect from a course that’s just 6,300 yards from the tips.” But as the mourning on this Reddit thread makes clear, it’s beloved by local linksmen, and by runners: The Roy Griak Invitational, hosted at the course, is one of the Midwest’s premier cross-country events for high-school and college athletes.

Part of the charm and value of these spaces is the way they immortalize local legends. Les Bolstad, a Big Ten golfing champion in the late 1920s, went on to lead his alma mater as a coach for three decades. Roy Griak, a coach for more than 50 years, guided the Gophers to two cross-country titles. The golf course may be repurposed; the invitational may not live on. But hopefully the university and its city can find other ways to honor these native sons.