A big increase in the tax on university endowments is adding to financial uncertainty for the wealthiest colleges in the U.S., leading several already to lay off staff or implement hiring freezes.

What You Need To Know

An increase in the tax on university endowments is creating financial challenges for the wealthiest U.S. colleges

Some, such as Yale and Stanford, have already laid off staff or implemented hiring freezes

The tax was signed into law by President Donald Trump and takes effect in 2026

Experts say it could lead to reduced financial aid

Colleges usually use most of their endowment proceeds for scholarships, but they'll soon have to use some of the money to pay the higher tax

Spending more endowment money on taxes could also lead colleges to reduce financial aid, cutting o

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