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AAS Policy Alert: Tax Reform Consequences for Higher Education

Tuesday, November 7, 2017 - 12:20

Higher education organizations are concerned about some of the proposed tax code changes in the Tax Cuts and Jobs Act relating to colleges and universities, which include taxing graduate tuition waivers as income and elimination of the student loan interest payment deduction.

Summary

This week, Congress began committee consideration of sweeping reform to the federal tax code with potentially significant implications for the financial accessibility and burden of higher education. In the House of Representatives, the proposal known as the Tax Cuts and Jobs Act is being marked up (debated and amended) in the House Ways and Means committee right now.

As written, the bill language would eliminate the student loan interest deduction, require graduate tuition remission to be taxed as income, and have other implications as outlined by the American Council on Education.

The Association of Public and Land Grant Universities (APLU) and the Association of American Universities (AAU) have both released statements expressing appreciation for Congressional interest in reforming the federal tax code, but deep concern with several of the provisions that would “make higher education less affordable and less accessible to middle- and low-income Americans” (Mary Sue Coleman, President, AAU).

The House Ways and Means Committee leadership intends to finish markup by Thursday, 9 November, the same day that the Senate Finance Committee reportedly intends to release its version of tax reform. Speaker Ryan has set the Thanksgiving recess as the deadline for final passage of tax reform through both chambers of Congress. If you wish to provide constituent input, do so as soon as possible — ideally today or tomorrow to members of the House, especially if your representative is a member of the House Ways and Means Committee, and this week to Senators, especially if one of your Senators is a member of the Senate Finance Committee. General instructions on whom to contact and how to do so are provided below.

As an illustration, the Council of Graduate Schools (CGS) put together a list of hypothetical scenarios that illustrate the potential implications of taxing waived or remitted tuition as income on graduate students. The legislation would also tax tuition waived by colleges and universities for their employees (and employee spouses or dependents) and private companies for their employees.

Articles in Chronicles of Higher Education, Inside Higher Ed, and Diverse: Issues in Higher Education discuss the various ways the current proposal could impact higher education, and what the positions of advocacy organizations like the APLU, AAU, and CGS are.

What Can You Do?

As with any issue, you can contact your representatives in Congress should you wish to comment on the Tax Cuts and Jobs Act. You can ask that your representatives amend the legislation (i.e., to remove, add, or modify provisions), to support specific provisions of the bill (e.g., vote against amendments to a specific provision), and/or to support or oppose the bill in its entirety.

  • HOUSE: Determine who your Representative is.
    • Contact your representative’s office via phone or email. Customize the email text or a phone script (or outline, whatever you find useful) using the points raised in the above materials.
    • If your representative is on the House Ways and Means Committee, contact them today; otherwise, contact them by the end of this week.
  • SENATE: Determine who your Senators are.
    • Contact both of your Senators’ offices via phone or email. Customize the email text or a phone script (or outline, whatever you find useful) using the points raised in the above materials.
    • If your Senator is on the Senate Finance Committee, contact them by the end of this week; otherwise, contact them by one week from today.

It is crucial that you customize your message. According to the Congress Foundation’s 2017 study on how Congress members respond to communications, individualized messages and phone calls are about an order of magnitude more influential than form emails (refer to their Figure 1).

You may also wish to tweet to your representative. Generally, members will have links on their websites if they are active on Twitter.

Ashlee N. Wilkins
John N. Bahcall Public Policy Fellow
American Astronomical Society (AAS)
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