NACAC: Tax Proposal Would Adversely Affect Education

Michael Rose

Arlington, VA (Dec 6, 2017) — With the US Senate and House of Representatives set to convene a conference committee to finalize tax reform measures, the National Association for College Admission Counseling (NACAC) remains concerned that parts of the legislation will have an adverse effect on education.

The House bill would repeal several provisions that help make college affordable, including the Lifetime Learning Credit; Student Loan Interest Deduction (SLID); qualified tuition reduction; and a measure that allows employers to offer employees up to $5,250 annually in tuition assistance—dollars that are currently excluded from taxable income. Together, these programs help thousands of students access higher education. NACAC urges Congress to maintain these provisions, as the Senate bill does.

In addition, NACAC is opposed to the proposed excise tax on investment income generated by endowments at private colleges and universities. The 1.4 percent tax would affect colleges with endowments of $250,000 per student (House) or $500,000 per student (Senate). Endowments help support nearly every aspect of an institution’s operations, including the delivery of high- quality affordable education and programs that support student retention and success.

Furthermore, proposed changes to the state and local tax (SALT) deduction would have a significant negative effect on state budgets, forcing state governments to make very difficult and potentially harmful funding decisions. The SALT deduction helps state and local governments fund public services that provide widely shared benefits. Limiting the deduction would almost certainly make it harder for states and localities—many of which already face serious budget strains—to raise sufficient revenues in the coming years to fund higher education and other priorities, exacerbating the ongoing decline in state support for higher education. As a result, states would likely be forced to find alternative sources of funding, such as raising tuition at public colleges and universities—a move that could force low- and middle-income students out of higher education.

Lastly, NACAC is concerned about the overall fiscal implications of the bill. Non-partisan organizations have estimated that the tax legislation will add hundreds of billions of dollars to the national debt. Unfortunately, this creates immense pressure to make further cuts to already-underfunded federal education programs. Discretionary funds, including those administered by the Department of Education, have suffered substantial cuts over the last several years. Providing such massive tax cuts at a time when the federal investment in education is already eroded will likely reduce educational attainment and exacerbate ongoing economic challenges in our country.

While NACAC is pleased that the Senate bill doubles the tax deduction to $500 for educators, including counselors, who spend their own money on classroom supplies, the tax package as a whole is poised to negatively affect educators and the students the serve.

The National Association for College Admission Counseling (NACAC), founded in 1937, is an organization of nearly 16,000 professionals from around the world dedicated to serving students as they make choices about pursuing postsecondary education. NACAC is committed to maintaining high standards that foster ethical and social responsibility among those involved in the transition process, as outlined in the association's Statement of Principles of Good Practice: NACAC’s Code of Ethics and Professional Practices.

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