Nota Bene: Update on Tax Bills

On Capitol Hill last week Congress took significant actions that will impact higher education. The House tax bill proposes the elimination of many benefits important to colleges and universities, and the students and families we serve. And while the Senate bill retains the student and family benefits and Private Activity Bonds, it also contains a new excise tax on private college endowments, similar to the House bill.

The National Association of Independent Colleges and Universities (NAICU) has reviewed and assessed the contents of both the House and Senate tax bills and identified the biggest areas of concern for independent higher education.

Key provisions that would be important to private higher education are outlined below. My private college presidential colleagues and I are asking our representatives to:

• Please retain the student and family tuition and loan benefits, as the Senate bill would, in any final conference report on the tax bills. This includes the Student Loan Interest Deduction, Sec. 127 employer-provided education assistance, Sec. 117(d) tuition remission benefits, and the Lifetime Learning Credit.
• Please retain Private Activity Bonds, as the Senate bill would, in the final conference report.
• Please reject the elimination of advance refunding of bonds that is in both the House and Senate bills. Being able to issue a tax-exempt refund gives issuers the greatest flexibility in taking advantage of lower interest rates and other market conditions. This would generate savings which are passed on to our institutions and, ultimately, our students and families.
• Please reject the new excise tax on private college and university endowments that is in both the House and Senate bills, an intrusion into charitable giving that would set a dangerous precedent. 

Private colleges and universities are doing everything possible to keep costs down to make a college education accessible and affordable. However, the impact on student benefits, bond financing, and endowments contained in the tax proposals will negatively affect our ability to keep college affordable.  Students, unfortunately, will bear the brunt of these harmful proposals.

The expectation is that a final conference report will be brought to each chamber and President Trump by December 31. However, it could happen sooner. If you are so inclined, we ask you to contact respective House and Senate members and voice your opinion on these important topics.

We will continue to keep you informed of additional developments.