GOP tax plan would hit Illi­nois stu­dents hard

Chicago Sun-Times - - OPINION - BY DAVID W. TRETTER David W. Tretter is pres­i­dent of the Fed­er­a­tion of In­de­pen­dent Illi­nois Colleges and Uni­ver­si­ties.

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.

CHIP SO­MOD­EV­ILLA/ GETTY IMAGES

Speaker of the House Paul Ryan, R- Wis., is a driv­ing force be­hind GOP tax re­form ef­forts.

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