Update: Taxes and Education

On November 6, I wrote about the GOP tax bill introduced in the House of Representatives. That bill is due to be voted on this week.

Meanwhile, the Senate has introduced their own bill and it differs significantly from the House’s Tax Cuts and Jobs Act. The Senate Finance Committee is considering this bill this week.

Again, let’s focus on the impacts on students and colleges and universities. As described in my last post, the House bill would require students to report tuition fee waivers as taxable income. Many of you are concerned about this, and rightfully so, as mathematics graduate students would be affected. About 60% of the 145,000 students who receive tuition waivers are in STEM fields. According to Nature, “higher taxes could be one more disincentive to pursuing an advanced degree, given the already bleak prospects in an oversaturated academic job market and the flat budgets at science-funding agencies.”

The Senate rejects this tax on tuition waivers that appears in the House bill. The Senate version also preserves the American Opportunity Tax Credit, Lifetime Learning Credit and Hope Scholarship Credit, as well as the credit for student-loan interest. All of these are discussed in my last post.

The Council of Graduate Schools (CGS) has put out a piece describing several examples of the potential impact of taxing tuition waivers on master’s and doctoral students.

The Senate agrees with the House, though, in the creation of a new excise tax of 1.4% on endowments at some private colleges and universities. Endowments are often used to support students demonstrating financial need and to broaden the pool of students who can attend. This excise tax will impact these students, our most vulnerable. The House bill originally would have placed this tax burden on schools with at least 500 students and with assets of \$100,000 per student; this amount is now \$250,000 per student.

These are not the only provisions in the Senate bill that would impact AMS members. Media postings are now coming out at a rate, and the Chronicle of Higher Education is just one place you can learn more. The American Council on Education is another good resource. They end their piece on this with:

“Higher education leadership, staff, faculty, and students should actively engage in advocacy activities to remind Congress of our community’s priorities.​ Also, please make use of our Contact Congress pages to help reach your congressional delegation about the specific higher education provisions most important to you.”

You can find how to contact your members of Congress at the AMS Washington Office web page (link in upper right corner), and I encourage you to follow ACE’s advice and reach out about the provisions important to you! The CGS examples above could be useful making your case.

The House and Senate versions of the tax bills differ in many ways, not only on the education provisions. The differences need reconciled before being signed into law by the President, and so it is still timely to weigh in with your Congressional members on the points you care about.

About Karen Saxe

Since January 1, 2017, Karen Saxe is Director of the Washington Office of the AMS which works to connect the mathematics community with Washington decision-makers who impact science funding. Before joining the AMS, Karen was DeWitt Wallace Professor in the Department of Mathematics, Statistics, and Computer Science at Macalester College in St. Paul, Minnesota. Over many years she has contributed time to the AMS, MAA, and AWM, including service as vice president of the MAA and in policy and advocacy work with all three. She was the 2013-2014 AMS-AAAS Science & Technology Policy Congressional Fellow, working for Senator Al Franken on education issues, with focus on higher education and STEM education. In Minnesota she has served on the Citizens Redistricting Commission following the 2010 census and serves on the Common Cause Minnesota Redistricting Leadership Circle. She has three children and, when not at work especially enjoys being with them and reading, hiking, skiing, and sharing good food and wine and beer with family and friends.
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One Response to Update: Taxes and Education

  1. Amy Cohen says:

    Thanks for this update. The Senate version is somewhat better than the House version, especially as it affects education.

    I certainly agree with the final statement from the ACE on the importance of all citizens communicating clearly with their representatives in Washington and in their state legislatures about the impacts of the pending tax legislation.

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