Through teaching, research and innovation, and public service, America’s colleges and universities make critical contributions to our society. Students who graduate from a college or university enjoy higher lifetime earnings, better health, and greater civic engagement. In addition, colleges and universities are often the largest and most stable employers in their communities, offering good wages and benefits. Traditional nonprofit public and private colleges and universities historically have been granted tax-exempt status, which permits them to use more resources to fund the educational activities, academic research, student financial aid, and community programs that fulfill their core missions of teaching, research, and public service. The Federal Tax Code impacts colleges and universities’ missions through provisions affecting, among other things, aid to students; incentives for charitable giving; tax-exempt financing; unrelated business income; and the R&D tax credit.