(as defined in section 25A(f)(2))— (i) which had at least 500 tuition-paying students during the preceding taxable year, (ii) more than 50 percent of the tuition-paying students of which are located in the United States, (iii) the aggregate fair market value of the assets of which at the end of the preceding taxable year (other than those assets which are used directly in carrying out the institution's exempt purpose) is at least $500,000 per student of the institution, and (iv) of which less than the applicable percentage of undergraduates enrolled during the taxable year receive Federal Pell Grants under section 401 of the Higher Education Act of 1965 ( 20 U.S.C. 1070a ). (B) Students For purposes of subparagraph (A), the number of students of an institution (including for purposes of determining the number of students at a particular location) shall be based on the daily average number of full-time students attending such institution (with part-time students taken into account on a full-time student equivalent basis). (C) Applicable percentage For purposes of subparagraph (A), the applicable percentage is— (i) in the case of taxable years beginning in 2018, 28 percent, (ii) in the case of taxable years beginning in 2019, 29 percent, (iii) in the case of taxable years beginning in 2020, 30 percent, (iv) in the case of taxable years beginning in 2021, 31 percent, (v) in the case of taxable years beginning in 2022, 32 percent, and (vi) in the case of taxable years beginning after 2022, 33 percent. (2) Undistributed required payout With respect to a qualified institution of higher education for a taxable year— (A) In general The term undistributed required payout means, as of a date on which a tax is imposed under subsection (a) or (b), the amount by which— (i) the required payout for such taxable year, exceeds (ii) the grants to working-family students made by such institution before such date out of such required payout. (B) De minimis exception If an undistributed required payout with respect to a qualified