Tax bill puts benefits for colleges, students on chopping block
- A large-scale tax overhaul bill put forth by House Republicans Thursday proposes lower tax rates for corporations, which would be offset by slashing many popular tax breaks, including those which have traditionally benefited higher education, reports Inside Higher Ed.
- The bill would implement a 1.4% excise tax on private institutions with endowments at or greater than $100,000 per fully enrolled student and increase the standard individual tax deduction two-fold, thereby threatening charitable donations to institutions, according to experts.
- Student borrowers will also be impacted, as the legislation would also eliminate reductions on loan interest rates, as well as state and local income taxes — which would impact the ability for higher education institutions to enroll more lower-income students and most likely diminish already dwindling public funding.
Higher education institutions are already feeling the heat of reduced public investment — with many being forced to consider merging with other schools and others scrambling to sell their assets and find alternative sources of revenue to stay afloat. Now with many of the tax deductions which encourage giving threatened, there could be even more of a squeeze for these institutions.
At the same time that their primary source of revenue — students — may feel less compelled to enroll, due to the cost of tuition and loans with high interest rates. To start navigating this reality, higher education leaders may need to start looking into other sources of revenue, such as renting out school buildings to promote other industries and focusing on student ROI to ensure potential applicants that any loans will be easy to repay in the future. Further, it's critical that leaders reach out to their advocates in Congress to discuss the impacts their institutions and customers will face.
- Inside Higher Ed Tax Benefits at Risk for Colleges, Student Borrowers
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