Approximately seven out of every 10 2016 high school graduates enrolled in college, whether that meant private school, public university, community college, or Ivy League. And it looks like that trend is going to continue this year. In all, 20.4 million students are attending across all years of secondary education, a 25 percent increase since 2000. Ever increasingly, a college education is a necessary key to even basic careers.
The new GOP tax plan threatens to gate up that avenue to success for many. Its effects on the average taxpayer are too many to enumerate or, honestly, easily understand, but the impact it will have on the college-bound comes primarily from three avenues, mostly in the draft of the bill that was passed in the House of Representatives.
The bill that passed the House would have eliminated all tax deductions on interest paid to student loans. The Senate bill preserves this deduction for interest under $2,500.
Graduate students commonly are able to study through tuition waivers granted by the universities who benefit from their research. The House version of the bill would make those waivers, often worth tens of thousands of dollars, into taxable income, even though the students who receive them are usually living on small academic stipends, which are already taxed.
Private college endowments could wind up being taxed. Endowments are the charitable waivers by which private colleges and universities allow students to attend who could never begin to afford their fees. Both the House and Senate passed this inclusion, though the Senate specified that it would only apply to endowments valued at $500,000 or more. This limits this taxation to 25 of the most prestigious universities in the country (including all eight members of the Ivy League) and puts them out of the reach of anyone who can’t simply pay for their education out of pocket.
It’s still not clear which version of the GOP tax plan will wind up being passed. Both versions have staunch advocates. The Senate’s bill is slightly more compassionate, but still stands to gut the safety net for those who need college but can’t simply write a check, making it once again a rich man’s privilege.
What do you think? Is the GOP tax plan going to affect your, your children’s, or your students’ college plans? Please sound off in the comments.