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 institution of higher education for a taxable year is not more than 1 percent of the required payout with respect to such institution for such taxable year (or, if less, $250,000), subsections (a), (b), and (c) shall not apply with respect to such undistributed required payout. (C) Progressive grant requirement A grant out of a required payout for a working-family student for an academic period shall only qualify for the purposes of subparagraph (A)(ii) to the extent that the amount of grants by such institution for such student for such academic period is not more than the least amount of grants given by such institution out of such required payout for such academic period to any degree-seeking working-family student with a lower household income than such student. For purposes of the preceding sentence, grant amounts shall be determined on a per credit basis. (3) Required payout The term required payout means, with respect to any qualified institution of higher education for any taxable year, an amount equal to 25 percent of the average net investment income with respect to such institution for such taxable year and the preceding 6 taxable years. (4) Net investment income The term net investment income means, with respect to any qualified institution of higher education for any taxable year, the excess (if any) of— (A) the aggregate fair market value of all endowments of such institution (determined as of the close of the preceding taxable year), minus any contributions to such endowments received during such preceding taxable year, plus any spending from such endowments during such preceding taxable year, over (B) the aggregate fair market value of all endowments of such institution (determined as of the close of the second preceding taxable year). (5) Grant