GOP tax plan would hit Illinois students hard
Illinois college students need a high- quality, affordable education now more than ever. Our private colleges and universities have worked hard to provide that quality education at an affordable — and increasingly competitive— price in recent years.
But that progress faces a serious threat from Washington.
Even as Illinois has made historic funding cuts in the last decade, private campuses across our state have invested in students by controlling costs in manyways, seeking alternative ways to generate revenues to provide the high- quality education students need, and streamlining programs to provide more value for students’ investments.
These actions are in response to the needs of the students and families we serve. And in part, these actions address the call from lawmakers to slowdown the increasing cost of higher education while still providing access to a college or university that best fits an individual student’s needs.
Now Congress, through a tax reform bill that has just been unveiled, threatens to throwup additional roadblocks to the financial stability of private nonprofit colleges and universities and their ability to serve students.
One ominous proposalwould place a tax on private college endowments. The earnings from endowments, along with private fundraising and other institutional revenues, have long provided scholarships to students aswell as base funding for academic programs. Cutting this revenue will decrease funding for needy students and increase the costs to offer programs.
In Illinois alone, private colleges and universities annually contribute more than $ 1 billion in institutional aid, enabling tens of thousands of students to achieve a college degree. Taxing endowments makes little sense if our goal is to increase college participation.
Another part of the proposal would eliminate Employer- Provided Education Assistance, which provides much- needed assistance to working students by incentivizing employers to provide tuition assistance benefits. Most recipients of this benefit are nontraditional students trying to improve their skills and workplace mobility. Colleges, businesses and labor organizations all support this important benefit that allows employers to invest in their workforce, while allowing employees the ability to advance their education and experience.
If also enacted, the elimination of tax- exempt bonds for private colleges and universities could significantly raise the cost of capital projects, at a time when the need for infrastructure improvements and safety upgrades ( many mandated by government) are greatly needed. This type of bond financing for not- for- profits is a proven tool with a decadeslong record of success for providing vital public services and creating jobs.
Low- cost access to capital helps keep private colleges and universities strong, enabling us to keep expenditures lows owe can focus on the work we do for the public good and the students and families thatwe serve.
And there are other provisions that benefit students and institutions that are the target of new taxation. The proposed tax reform bill, for example, would remove the student loan interest deduction, though this is incredibly important as students start their careers and begin repaying student loans. The bill also would tax employee tuition and dependent benefits, which help retain talented staff andwould hurt the lowest- paid college employees the most.
A top goal of tax reform should be to support college students and the institutions they attend, not hurt them.
Illinois private colleges and universities have long been committed to providing educational services for the common good. As students succeed, so does our economy and state. Targeting private colleges and universities in this bill could have severe long term consequences, and further deters our national and state goals of having 60 percent of our adults holding some college credential by 2025.
Congress should seek ways to encourage the American dream, not shatter it.
Congress, through a tax reform bill that has just been unveiled, threatens to throw up additional roadblocks to the financial stability of private nonprofit colleges and universities and their ability to serve students.
Speaker of the House Paul Ryan, R- Wis., is a driving force behind GOP tax reform efforts.