Loss of Federal Funding and Tax Penalties for Campus Protests
This law imposes severe financial penalties on universities that fail to remove permanent protest encampments that disrupt classes or block access. If a university loses federal funding, new students will lose access to financial aid (grants, loans). To avoid a massive 50% tax on its endowment assets, the university must cover the financial aid costs for currently enrolled students itself.
Key points
Universities lose access to federal funds (including Title IV student aid) if they fail to remove encampments lasting 7 days or more that disrupt instruction or block students' entry/exit.
Universities that lose funding face a new, extremely high tax (50% of their endowment asset value), unless they personally fund the aid for students already enrolled.
Students continuing in the same degree program are protected from losing financial aid, provided the university chooses to avoid the tax penalty.
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