On July 9, President Val Smith announced to the college community that, because of the passage of President Trump’s One Big Beautiful Bill Act (OBBBA), Swarthmore would be spared from the federal tax on endowment returns. While the OBBBA included steep hikes of the existing 1.4% endowment tax for private colleges, a clause in the final legislation exempted colleges with fewer than 3,000 students from any tax at all. The exemption came after many months during which Swarthmore, as part of a coalition of 24 small colleges that rely heavily on endowment returns, directly lobbied Congress against an increase in the tax.
Preparation at the College
In an interview with The Phoenix, VP for Finance and Operations Rob Goldberg and VP for Communications and Marketing Andy Hirsch said that the coalition formed “organically” in December 2024 and January 2025. According to Goldberg, Swarthmore and other small colleges started hearing from national higher education organizations, like the National Association of Independent Colleges and Universities, about the tax proposals that then-President-elect Trump planned to pursue once inaugurated. These schools wished to distinguish themselves from universities like Columbia University and Harvard University that have larger budgets and enrollments and are facing more high-profile attacks from federal Republicans.
Trump has pursued a broad range of actions targeting elite institutions of higher education. As his administration continued, discussions turned to the upcoming budget process, in which the Trump administration and legislative Republicans planned to pursue increases in the federal endowment tax, up to a proposed 21% for the wealthiest institutions. If those steepest proposals were enacted and applied to Swarthmore, the college could have faced an obligation of nearly $30 million per year.
To monitor and respond to the threats posed by the Trump administration, Smith announced in April her formation of a government relations task force that included four faculty members and five senior administrators. The work of the task force is demanding, requiring at least biweekly meetings, sometimes on short notice, according to Professor and Chair of Economics Erin Bronchetti, who is on the task force.
In communication with The Phoenix, Bronchetti said that Smith and Goldberg have “encouraged the faculty members on the task force to be completely candid in our feedback and idea sharing.” Associate Professor of Political Science Ben Berger, another faculty representative on the task force, echoed these sentiments, writing, “I’ve enjoyed the opportunity to work collaboratively with the administration and my colleagues.”
Small Colleges Come Together
In response to the growing threat of an increased endowment tax, the Small College Coalition — Hirsch’s and others’ name for the group — began to discuss potential action plans. According to Goldberg, the coalition realized that “this was a very particular issue with a very particular legislative process.” As a result, the group felt there was a way to interact with lawmakers in Washington, D.C., so that they were not simply passive in the face of the proposals.
To help prepare for these interactions with lawmakers, the Small College Coalition interviewed several lobbying firms to determine how each might represent the group during the upcoming legislative battle. Eventually, the Coalition decided to use the American Council on Education (ACE) as a “fiscal agent” to hire a government relations firm. House lobbying disclosure forms show the hiring of Ogilvy Government Relations (OGR), a firm with over $6,000,000 in contracts thus far in 2025, by ACE for representation on “issues related to the taxation of college endowments.” While neither Hirsch nor Goldberg initially provided the specifics of its contract, Hirsch later confirmed to The Phoenix that the Small College Coalition hired OGR through ACE.
While the total costs of the contract were divided among the 24 schools in the coalition, Hirsch shared that Swarthmore paid $13,000 for a one-year commitment from Jan. 1 through Dec. 31. The forms show that OGR made $60,000 from the contract with ACE at-large during the first quarter of 2025, from Jan. 1 to March 31, and lists Tucker Shumack, Alissa Wilcox Clees, Karissa Willhite, and Dee Buchanan as the OGR lobbyists on this issue.
According to Politico, several members of the Coalition, including Williams, Pomona, Claremont McKenna, and Davidson Colleges, as well as Washington and Lee University, also hired their own separate lobbyists for the first time in their histories. Washington and Lee, specifically, hoped to emphasize to lawmakers the contrast between it and schools like Columbia, including its lack of major pro-Palestine encampments and demonstrations on campus in recent years.
President Smith Goes to Washington
To lend weight to their cause among a larger group of legislators, the group ensured geographic diversity among its colleges, both in terms of regions and states. Among the 24 schools, none had strong existing connections to their federal representation. For messaging purposes and coordination, the Coalition usually held meetings every couple of weeks. An executive committee of ten or twelve schools within the Coalition was formed, again with the strategic goal of having wide geographic reach and access to an ideological diverse set of lawmakers. Swarthmore was on this executive committee, which had weekly meetings on messaging and logistics in addition to the meetings every few weeks with the full Coalition and its representation.
Goldberg told The Phoenix that the Coalition had discussions to determine the goal of direct interactions with Congress. A key question was whether to lobby to keep the endowment tax rate for small schools at the 2017 status quo level of 1.4%, or merely try to limit the severity of an increase. The group eventually decided to try to “at least limit the increase,” according to Goldberg, partially by suggesting a different tax rate for schools with smaller enrollments. A complete exemption from the tax, which the final legislation included, was not considered a realistic goal. “We thought people would think we were out of left field if we came to say, ‘not only do we not want you to give us an increase, we just want you to exempt us altogether,’” Goldberg said.
Members of the Swarthmore administration — including Hirsch, Goldberg, Smith, and General Counsel Sharmaine LaMar — took multiple trips down to Washington, D.C., to interact with lawmakers, supported by coordination from the coalition and OGR’s help with navigating the complexities of Congress.
In these meetings, representatives of the Coalition schools (often Goldberg and Hirsch for Swarthmore) emphasized their institutions’ fundamentally different financial structures. Messengers stressed the importance of endowment returns for causes that Republicans might support, like financial aid and college accessibility, and the relative independence from federal funding that large endowment-to-student ratios allow. “We were able to tell a common story about how small colleges use endowments, how the impact of a large endowment tax based purely on endowment-to-student ratios was going to hurt the very goals that I think Congress is trying to achieve,” Goldberg said.
Hirsch emphasized that many schools’ representatives “really didn’t understand the differences in how endowments worked at different institutions. It was like this light bulb moment where it was, like ‘Oh, wow. We need to tell our story a lot.’”
Bronchetti shared that the administrators on the government relations task force, including Hirsch and Goldberg, solicited ideas from her and other faculty representatives about how to convey the way that Swarthmore and similar schools use their funds. She said the task force had a number of brainstorming sessions about the approach the school would take while speaking with members of Congress and their staffers: “I appreciated being brought into that conversation and hearing frequent updates on their efforts, which were substantial.”
While she is unaware of any faculty being asked to directly engage in Washington, D.C., Bronchetti believes this was the “right division of labor. The College administration bore these costs (of time, travel, and many, many meetings) so that we faculty could continue focusing on what we do best, which is delivering the academic program.”
Berger also wrote, “Faculty members didn’t have a substantial role in the lobbying efforts.” He continued, “But, we wanted the same thing that the administration did: as little financial burden as possible.”
Several schools also communicated their contributions to their local economies to show how an untaxed endowment might have positive effects beyond their campus lines. In communication with the Chronicle of Higher Education in June, Goldberg called Swarthmore “an economic engine for our local region and for the state,” citing the ~$1 million in Ville economic activity every year from student dining plans and the subsidized passes for local public transportation.
Goldberg told the Chronicle that the tax “has second- and third-order effects that I don’t know if people really understand.”
A paper handout that Swarthmore used to better communicate its financial structure spotlighted the full extent of its financial aid program. Statistics on the page include the average funding aided Swarthmore students receive per year, the amount of the college’s annual operating budget that comes from federal funds, and the lack of an increase in average cost for a student on financial aid today as compared to a student in 2004. Perhaps to lobby Pennsylvania’s representatives, the sheet states that 10% of Swarthmore students come from the state, with 68% of them receiving financial aid. Additionally, it also stresses that over 2,700 alumni live in the state and cites a 2018 Association of Independent Colleges & Universities of Pennsylvania study that found Swarthmore contributes $300 million yearly to the state’s economy.
The college’s administrators emphasized that the Coalition’s direct lobbying was often more than a PR effort and also required a fluent understanding of the legislative process. The first language for the OBBBA came out of the House in late May, shortly after the 2024-25 academic year ended. During those first weeks of negotiations, representatives of small colleges met mostly with the House Ways and Means Committee. The Constitution’s “Origination Clause” requires that all revenue measures begin in the House, and Ways and Means oversees such provisions.
Once the House passed its original version of the bill and handed it over to the Senate, most of the Coalition’s work was targeted to the Senate Finance Committee. Importantly, the bill would only be able to pass the Senate as part of the budget reconciliation process, a way of passing legislation with only 50 votes (plus the VP’s tie-break), rather than the 60 votes normally required to overcome a filibuster. The Byrd Rule allows the reconciliation process only for purely budgetary legislation and is designed to ensure that Congress can pass crucial funding legislation even in a closely divided session.
However, in recent years, this has meant that any legislation passed through reconciliation can practically only be influenced by the majority party. Goldberg was careful to clarify, therefore, that the Coalition’s lobbying efforts were almost entirely reserved for Republicans, both because the entire Democratic caucus was already united against the Republicans’ legislation — including the endowment tax provisions — and because only the majority party would have any say over the provisions.
Among Republicans, Goldberg said, “Any member of the Senate Finance Committee who had a school in their state was going to be reached out to and talked to.” Other publications have reported that Grinnell College’s leaders were in direct and productive communication with Senator Chuck Grassley (R – IA), and that Sen. James Lankford (R – OK) was interested in softening the increase in an endowment tax from the beginning of negotiations. Both Grassley and Lankford are on the committee.
Two of Swarthmore’s three federal-level representatives, Congresswoman Mary Gay Scanlon (D – PA05) and Senator John Fetterman (D – PA), are Democrats, rendering them eager but unable to help much this past summer. When asked also about Swarthmore alum Chris Van Hollen ’83 (D – MD), Hirsch said that the senator was “as helpful as he could have been.” Goldberg did tell The Phoenix, however, that Smith was in direct communication with Swarthmore’s third federal-level representative, Sen. David McCormick (R – PA), in the final days of negotiations. Hirsch also shared that he and other administrators met once with McCormick’s staff on campus. McCormick beat incumbent longtime Democratic senator Bob Casey in 2024 by only .22% and represents a state with many prominent small colleges.
McCormick’s, Fetterman’s, and Scanlon’s offices did not respond to The Phoenix’s requests for comment.
As to whether there were Republican senators who were especially receptive or resistant to lobbying efforts, Goldberg observed, “I think there was general receptiveness to, ‘I’m a Senator. I have a school in my state that’s going to be impacted by this. Now I know more about what the impact is going to be.’”
While Goldberg, Hirsch, and relevant players like Jonathan Fansmith, senior VP for government relations and national engagement at ACE, certainly feel their efforts helped, there were nonetheless other factors involved.
Pressures
While reporting has suggested that the Trump administration kept an almost obsessive tab on the status of its major agenda items in the House and Senate’s language, they also exerted enormous pressure on legislative Republicans to get a version of the bill on the president’s desk by July 4. This timeline was much more rushed than other recent major reconciliation processes, including the GOP’s 2017 Tax Cuts and Jobs Act and the Democrats’ 2022 Inflation Reduction Act. The time constraint meant that colleges had less time to make their case, but also that they might have partially gotten lucky, as the language incumbent at the time the Senate needed to pass it exempted small colleges from an endowment tax. “The influence the collective felt from the Trump administration was just its pressure on Congress to get a bill done,” Goldberg said.
Hillsdale College, a small far-right Christian school in Michigan, was also central to the legislative battle over an endowment tax on small colleges. While Swarthmore’s administrators didn’t share specific information on its relationship to the negotiations, and Hillsdale wasn’t in the Small College Coalition, national publications have hypothesized that the exemption for small schools was created by Republicans at least in part to spare Hillsdale from the endowment tax. After hiring a team of lobbyists to avoid the tax and positioning itself as a rare ally of Trump’s within higher education, Hillsdale loomed large over endowment tax debates on the right. Originally, Republicans proposed an exemption from the increased endowment tax for religious schools, including Hillsdale, but Senate Parliamentarian Elizabeth MacDonough, who advises the majority on what provisions are eligible for passage under reconciliation, struck down the measure as non-budgetary. This left Hillsdale threatened by the tax hike and, therefore, sharing common cause with the Small Colleges Coalition.
Goldberg and Hirsch stated that it was impossible to know exactly to what extent each of these factors contributed to the small colleges’ exemption. “I think it’s all part of it,” Goldberg said. He continued about the college’s role in the negotiations, adding, “I don’t know if that was the thing that made the language go, but it certainly was a factor amidst all the other factors. But that’s just how bills are written in Congress … I think we felt good about having some say in what that outcome could have looked like.”
“Would it have happened without us? I don’t know, but I think our role was important,” Goldberg said.
“While the positive outcome regarding the endowment tax did owe a lot to considerations other than our lobbying efforts, my understanding is that the college was making very good progress before the reconciliation bill was passed,” Berger added.
Still, the OBBBA maintains or increases the federal tax on endowment returns for private schools with more than 3,000 students and at least $500,000 in endowment value per student. In the final legislation, the rate was increased to 8% for the wealthiest schools — Princeton University, Yale University, and Massachusetts Institute of Technology — with more than $2 million in endowments per student. “If you’re the president [Trump] and you were looking to punish higher ed through taxing endowment, you got what you were looking for, even though there’s a couple of schools who got exempt,” Goldberg said.
Looking Forward
Hirsch and Goldberg both told The Phoenix that, to their knowledge, Swarthmore has not previously engaged directly with the federal government in the same way it did this year. In recent months, the college’s administration has realized a need to engage more in national politics, given the rapidly changing national landscape for higher education. “We just can’t rely entirely on Swarthmore and [assume] we’re going to be immune from what’s happening,” Goldberg said. While the college is considering hiring longer-term representation in Washington to help make connections and support communication, Goldberg also said that how the college approaches any future federal advocacy will be determined on an issue-by-issue basis, and dependent both on severity of specific threats and the college’s potential for impact.
Berger agrees, saying, “Congressional lobbying isn’t always an option and can’t address every concern that all of us Swarthmore community members might have. Many issues affecting us aren’t coming from Congressional legislation.”
Hirsch and Goldberg both emphasized that the administration engaged with Congress on the endowment tax and saw the result as a relief only because of the tax’s threat to the core missions of the college. “We viewed it as an actual threat to our actual mission, which everyone benefits from and everyone supports on campus,” Goldberg said, adding that the original proposed rates were a “losing sleep at night kind of a scenario for us.”
Still, federal Republicans could take up another tax bill in the coming months that would undermine small colleges in a similar way, and myriad other threats to higher education persist. “If you’re an institution of higher ed, and you’re not worried about how this could come specifically to you, you’re not paying attention to what’s happening,” Goldberg said.
Barring any changes, though, Swarthmore will have $2 million more in yearly funding when the exemption takes effect in 2027. While that allows some time for the college to decide how to use it, Goldberg said there will be financial aid or federal response needs that it could go toward.
“We’re going to use that savings to support our mission and to prove to Congress that that money is better spent at the college than going to the Treasury,” he said. Due to the contrast between Swarthmore’s immense resources and growing economic insecurity, many faculty and students have taken an interest in how the college spends its money. Given the college’s direct entry into the national political scene and rapid changes in the federal government’s approach to higher education, these debates will continue to play out on campus.
