Provost notes tax bill reform will affect graduate students
Provost Lisa Lynch discussed the potential impact of a major Republican tax bill on the affordability of higher education in an email sent to the University community on Friday evening.
The email was sent in response to student concerns about the bill’s impact on the tax's treatment of loans and tuition waivers.
“Most of the emails that Deans, the President and I have received have come from concerned graduate students,” said Lynch in an interview with the Justice. “But we also heard from faculty and staff who are worried about the ramifications of the tax legislation.”
The 440-page legislation to overhaul the current U.S. Tax Code is the biggest rewrite of the code since 1986 and could dramatically impact undergraduate and graduate students’ ability to afford the costs of higher education.
The new tax code, which is being referred to by Republicans as a “middle-class tax cut,” would add an estimated $1.5 trillion to the federal deficit over the course of the decade. The bill roughly doubles the standard deduction, or the dollar amount that reduces the amount of income on which individuals are taxed.
Yet in order to cover this cost, certain deductions, including some tax benefits for those with college costs, are eliminated or reduced.
Lynch detailed what the effects of the bill would be on students, including increases in individual student’s income tax, the treatment of tuition waivers as taxable income and the elimination of the tax deductibility of student loan interest.
The house bill also eliminates the Lifetime Learning Credit and reduces the American Opportunity Tax Credit. The Lifetime Learning Credit offers up to $2,000 per year to cover tuition costs for individuals with a modified adjusted gross income of $65,000 or $130,000 or less for a married couple who files jointly.
The American Opportunity Tax Credit offers a slightly higher credit of $2,500 per child enrolled in college per year, which is available to individuals who earn $80,000 or less or married couples who earn $160,000 or less. The House bill would allow individuals to claim the credit for five years instead of four but at a reduced amount. The Senate bill would leave the tax credit untouched.
Patience Misner, a graduate student at the Heller School for Social Policy and Management and an executive board member of the Graduate Student Association, spoke about how the passage of the bill in its current form could reduce the affordability of higher education in an interview with the Justice.
“If this bill is passed it’s going to increase already existing disparities in education,” said Misner. “Students are going to be taxed on money they’ll never see and it’s going to make attending graduate and undergraduate school more expensive.”
The GSA is brainstorming ways to promote awareness about the potential impacts of the legislation. Misner and the rest of the executive board are planning a town hall in early December open to undergraduate and graduate students to discuss the tax bill.
Yet there are several obstacles that the bill faces in order to reach President Trump’s desk and to be signed into law, which Republican legislators are seeking to achieve before the end of the calendar year.
In its current form, the bill has only been voted on by the House. The Senate will vote on its own draft of the tax bill following the Thanksgiving recess.
If there are any differences between the Senate and House bills, a joint conference committee would have to be convened to resolve them.
Lynch also explained in the email that Brandeis is working with the Association of American Universities, an organization of 62 research universities across the U.S. that is speaking out about the potentially damaging effects of the proposed legislation. She also urged members of the Brandeis community to contact their representatives about the proposed legislation.
“We still do not know what terms will be included in any final legislation,” said Lynch in response to a question from the Justice about how the bill would affect low-income students and students who rely on financial aid.
“The most important thing at this stage is for people to weigh in with their views on the various proposals with their members of Congress,” she said.