Proposals to Change Federal Tax Regulations Have Many in the Higher Education Community Concerned

John W. Dysart
President
The Dysart Group

At the time of this writing, Congress is in the process of making significant changes to federal tax laws and several could negatively impact students and/or higher education institutions.  Final provisions are not available, but the following are under consideration:

  • The new law could eliminate the ability of students to deduct the interest from their student loans.
  • The House has proposed taxing tuition breaks for graduate students.
  • Many colleges and universities provide full or partial tuition benefits to spouses and children of employees.  It is possible that such benefits could now be taxed.
  • Tuition benefits for employees may also be subject to federal tax.
  • Other college tax benefits could be eliminated or reduced including The Lifetime Learning Credit, The Hope Scholarship Credit and The American Opportunity Tax Credit.
  • While it would only apply to the richest colleges and universities, there is a proposal to tax endowment income.

Final implications will not be known until the bill makes it through the reconciliation process and actually passes, but several of the current proposals have higher education advocates concerned.