This week the US House and Senate released separate versions of their tax reform proposals. The House bill has passed through the Ways and Means Committee and is on its way to the House floor. The Senate bill is in the Finance Committee. Before sending a tax reform bill to the President, the two chambers will need to resolve and reconcile the differences in the two versions.
The House’s Tax Cut and Jobs Act contains a number of provisions that would have a significant adverse impact on the ability of students and families to access and afford a college education. As first proposed, the House bill eliminates tax deductions for student loan interest rates, eliminates the tax-free provisions of employer provided educational assistance, eliminates tax-exempt bonds used by higher education, healthcare and other non-profit organizations for capital construction and renovations, taxes stipends and tuition waivers awarded to graduate assistants, and taxes the value of tuition for those students participating a in a tuition remission program. The House bill also proposes a new tax on endowments, a dangerous precedent that threatens the country’s non-profit organizations.
The details of the Senate tax bill are just emerging, but it does appear that the Senate did not eliminate the student and institutional benefits targeted by the House. The Senate proposal includes an excise tax on wealthy endowments, but the Senate’s threshold—as well as the revised threshold set by the House—excludes any endowment at a South Carolina independent college or university.
SCICU, on behalf of its members, shared our concerns about the deleterious effects that some of the tax reform proposals would have on our institutions and students with the SC Congressional delegation days after the House proposal was published. Although the House changed little of the initial proposal in committee, the Senate avoided including some of the most onerous provisions in its version of tax reform.
A number of independent college and university presidents in South Carolina have been in contact with their House and Senate members. SCICU President and CEO Mike LeFever will be joining other state executives and college presidents at the Fall Leadership Meeting of the National Association of Independent Colleges and Universities in Washington next week. NAICU and state organizations like SCICU will be working together with private college and university presidents to promote and protect the interests of students and their families as Congress works to shape a tax reform bill to send to President Trump.