Last week, the United States Senate passed a tax bill that would have major implications for universities. This comes on the heels of a bill that passed the US House of Representatives, which contained provisions that would make it much more costly to be a student. To quote from a piece by the University of Michigan President Mark Schlissel and Michael V. Drake,
The House bill would repeal current tax incentives, including the Student Loan Interest Deduction (which in 2014 helped 12 million taxpayers), the tax-exempt status of tuition waivers for graduate students serving as teaching and research assistants (which helped close to 145,000 people in 2011-12), and the above-the-line deduction for qualified tuition and related expenses.
This means interest on student loans would be treated just like credit card interest — neither would be deductible, at a time when many are struggling to repay their student loans. Graduate students who work their way through school by serving as research or teaching assistants receive tuition waivers that would be taxed. And students and parents from families with moderate incomes will no longer be able to deduct up to $4,000 in qualified higher education expenses from their taxable income.
The House bill would also repeal or devalue key credits that help low- and middle-income students, including the Lifetime Learning Credit, the Hope Scholarship Credit and the American Opportunity Tax Credit. The lower-income students who use these credits are those who can least afford to pay more for their educations.
The main hope at this point comes from the House and Senate having passed very different bills. The House bill contains the provision that would mean tuition waivers are no longer tax-exempt. The Senate bill does not contain this provision.
We’ve now reached the stage where the House and Senate bills have be reconciled — that is, where legislators and their staffers need to work out the differences between the two bills (which, as I said above, are pretty different). Universities are working hard to make sure that the final legislation does not include the House version of the grad student tuition waiver (or lack thereof).
One piece of information that came to light yesterday about a mistake in how the Senate bill taxes corporations means that it is more likely that the reconciled bill will also get rid of the grad student tuition waiver, which is not good news for graduate students or universities. The reason for this is that legislators will want to fix that mistake to add back corporate tax deductions, which will increase the cost of the bill. They’re already at the $1.5 trillion max, so they need to do other things to increase revenue. Like tax grad students. In other words:
That’s the bad news. The good news is that the mistake also means the Senate is likely to have to vote again on the bill. But I think focus yesterday was on how ridiculous it is that Republicans passed legislation with such a major mistake in it (which is true), without also focusing on the implications of this for the grad student tax.
I asked people who know a lot about this what someone like me or the students I know who are concerned about this can do. There was universal agreement that it is really important for students and others who care about this to contact their Representatives and Senators to let them know how they feel. The National Humanities Alliance has a tool that will make this easier for you. You can use the standardized language they provide, or you can personalize things to your situation. I always get nervous when calling my policymakers (even though I usually end up just leaving a message rather than speaking to an actual person and, when I have spoken to a person, they’ve always been very polite). So, I write out what I want to say ahead of time.
One thing to consider for students: if you live somewhere like Ann Arbor where our representative (Debbie Dingell) already shares our concerns with the bills but are still registered to vote in another area (say, the place you grew up) and the person in that area does not share your concerns about the bill, it might be more effective to contact the person who does not currently share your concerns. And, if the debate continues through the holiday break, you can try to visit your Representative and Senators at their district offices!
Another question that comes up is whether to contact the local office number or the DC office. I’ve been told by some people that it’s better to call the DC office (and the tool I linked to above will help you figure out those numbers). But if you can’t get through there, you can try the local offices. If you are unsure of who your representative is, you can click here. (By the way, other folks say it doesn’t matter which office you call. Everyone agrees that the most important thing is that you call somewhere, with where you call being less important!)
So, I like Ethan White’s strategy:
- The American Association for the Advancement of Science (AAAS) has more information on the proposed tax overhaul, suggestions for things you might want to highlight when talking to legislators, and information on how to take action.
- The National Association of College and University Business Officers (NACUBO) is organizing a #DontTaxEducation campaign. Their message “Don’t let Congress deliver a disproportionate and unprecedented hit on higher education. Ask lawmakers to accept the Senate position on these provisions.” Their page will help you contact your legislators.
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