Key Factors
- Bowdoin’s endowment returned 26% in fiscal 2026 and reached a file $3.6 billion.
- Endowment payouts now fund half of Bowdoin’s $250 million working funds.
- The brand new endowment tax exempts Bowdoin from July 2026, however its file yr nonetheless falls underneath the previous 1.4% rule.
Bowdoin Faculty’s endowment returned 26% for the fiscal yr that ended June 30, 2026, pushing it to a file $3.6 billion, Bowdoin introduced on October 23. That return beat the 16.2% median for faculty endowments in preliminary Cambridge Associates information.
Bowdoin at present sits on our record of no-loan schools that cowl want with grants.
The longer observe file is simply as sturdy. Bowdoin’s endowment has returned 13.7% a yr over 10 years and 11.1% over 20 years, which the school says ranks within the prime 1% of endowments Cambridge Associates tracks.
President Safa Zaki mentioned, “These glorious outcomes assist us maintain all that we do at Bowdoin.” Outcomes like these clarify why a 2025 proposal to lift the endowment tax focused the wealthiest faculties.
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Why It Issues
Endowment payouts now fund 50% of Bowdoin’s $250 million working funds, whereas internet tuition and charges cowl 38%. A decade in the past, these shares have been practically reversed. Funds restricted to scholarships lined 80% of the fiscal 2026 help funds, which exhibits why what faculty actually prices at a rich faculty can sit far under its sticker worth.
The Endowment Tax Issues
The One Large Stunning Invoice Act changed the flat 1.4% tax on endowment funding earnings with tiers of 1.4%, 4% and eight%. The regulation additionally raised the cutoff to three,000 tuition-paying college students, up from 500.
Bowdoin enrolled about 1,896 college students on campus this fall, so it avoids out of the tax going ahead. Even so, the exemption leaves 5 open questions:
- The file yr remains to be taxed. The brand new guidelines begin with tax years starting after December 31, 2025.
- The invoice is unknown. The tax applies to internet funding earnings, not the total 26% acquire. Again in 2018-19, Bowdoin paid about $700,000, in accordance with the Bowdoin Orient, when the endowment was $1.74 billion.
- One quantity protects the exemption. At roughly $1.9 million per on-campus pupil by our math, Bowdoin would land within the 4% tier if Congress lowered the cutoff.
- The funds has little cushion. With endowment payouts funding half of operations, a future tax would attain help and staffing straight.
- Treasury nonetheless owes steering. The regulation directs Treasury to write down guidelines that block faculties from restructuring to keep away from the tax.
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| Rule | Prior Legislation | New Legislation (OBBBA) |
|---|---|---|
| Pupil Threshold | 500 tuition-paying college students | 3,000 tuition-paying college students |
| Tax Price | Flat 1.4% | 1.4%, 4% or 8% by endowment per pupil |
| Bowdoin Fiscal Years Lined | Via June 30, 2026 | Beginning July 1, 2026 |
| Bowdoin Standing | Taxed | Exempt |
How This Connects
The three,000-student line means a small faculty with $1.9 million per pupil pays nothing, whereas a bigger faculty with much less wealth per pupil can owe 4%.
We’ve argued that taxing endowments isn’t sufficient when rich faculties nonetheless gather federal help. Bowdoin’s 26% yr provides either side of that debate a recent information level.
What’s Subsequent
Bowdoin’s tax submitting for fiscal 2026 will present what the file yr value underneath the 1.4% rule. Past that, look ahead to Treasury’s anti-avoidance guidelines and any invoice that lowers the three,000-student cutoff, which might deliver faculties like Bowdoin again underneath the endowment tax.
Editor: Colin Graves
The put up Bowdoin Faculty Endowment Returns 26%, Hits File $3.6 Billion in FY2026 appeared first on The Faculty Investor.
