Increases the federal excise tax on net investment income earned by private colleges and universities by changing the tax rate in the Internal Revenue Code and changes the asset‑per‑student threshold used to determine which institutions are treated as an “applicable educational institution.” The change to both the tax rate and the threshold expands or alters which private institutions pay the tax and how much they owe.

The amendments apply to taxable years beginning after the date of enactment, so institutions will need to adjust tax planning, reporting, and budgets for future tax years once the law takes effect.