To amend the Internal Revenue Code of 1986 to impose a tax on institutions of higher education that fail to use 33 percent of the growth in endowment value for grants for working-family students each year, and for other purposes.

Reducing Excessive Debt and Unfair Costs of Education Act of 2018 or the REDUCE Act of 2018 This bill imposes additional taxes on, and limits tax deductions for contributions to, certain institutions of higher education that (1) do not use a specified portion of net investment income for grants to working-family students, or (2) accept certain gifts that are restricted for uses other than scholarships. A "working-family student" is an individual who (1) is enrolled (part-time or full-time) as an undergraduate student, and (2) whose household income for the year does not exceed 600% of the poverty line for a family of the size involved. The bill modifies requirements for the tax-exempt status of institutions of higher education by adding requirements regarding (1) plans for limiting tuition increases, and (2) serving students who are eligible for Pell Grants or have household incomes that do not exceed 600% of the poverty line. The bill also requires institutions of higher education to make certain disclosures regarding net tuition, the management of endowments or investments, institutional aid, and funds provided by parents or grandparents of students. The revenues from the taxes imposed by this bill must be used to increase funding for the Pell Grant program.