Ses­sions wants to re­tain grad stu­dents’ tax break

House pro­vi­sion that would elim­i­nate it is ‘mis­guided,’ he says

The Dallas Morning News - - Nation & World - By TOM BENNING Wash­ing­ton Bureau tben­[email protected]­las­ Twit­ter: @tomben­ning

WASH­ING­TON — Dal­las Rep. Pete Ses­sions is press­ing GOP lead­ers to en­sure that the party’s fi­nal tax re­vamp pre­serves the tax-ex­empt sta­tus of a crit­i­cal tu­ition re­duc­tion used by tens of thou­sands of grad­u­ate stu­dents across the U.S.

That tax-free stand­ing, tied to those stu­dents’ work as teach­ing or re­search as­sis­tants, has hung in the bal­ance for weeks af­ter the House-ap­proved ver­sion of the tax bill marked it for elim­i­na­tion.

Such a change would make the re­duc­tions count as tax­able in­come, sky­rock­et­ing the bur­den for many grad stu­dents al­ready feel­ing a fi­nan­cial squeeze. And though schools would prob­a­bly try to blunt the im­pact, the pro­posal has prompted pas­sion­ate push-back in Texas and be­yond.

Ses­sions on Thurs­day ral­lied more than 25 fel­low House Repub­li­cans, in­clud­ing six other Tex­ans, to sign a let­ter to ob­ject to what he called a “mis­guided tax.”

The chair­man of the House Rules Com­mit­tee said a new levy on tu­ition waivers would add to the “grow­ing epi­demic” that younger Amer­i­cans face from sub­stan­tial stu­dent loans. He said it would pe­nal­ize “stu­dents who want to get ahead and gain an edge in their fields.”

And he in­di­cated that the higher ed­u­ca­tion world’s con­cerns are be­ing heard by the likes of Rep. Kevin Brady, the House’s top tax writer.

“He will do a lot bet­ter,” said Ses­sions, who has heard from stu­dents at South­ern Methodist Uni­ver­sity and other Dal­las-area schools. “His sen­si­tiv­ity on the is­sue has been raised be­cause of the tremen­dous feed­back from so many mem­bers, who’ve heard from peo­ple back home.”

The tu­ition pro­vi­sion is among the dozens of dif­fer­ences that must be worked out be­tween the House and Sen­ate ver­sions of a sweep­ing $1.5 tril­lion tax re­vamp.

House Repub­li­cans in­cluded the tu­ition piece in their bill as part of a slate of changes that have stirred col­leges and uni­ver­si­ties. Ses­sions, who voted for that House ver­sion, said Brady was “well-mean­ing” in craft­ing the tax bill but was “try­ing to bal­ance out in sev­eral ar­eas.”

And Brady, a Repub­li­can from The Wood­lands, on Thurs­day re­it­er­ated a pledge to “work to­ward a good, pos­i­tive out­come” on the is­sue.

Sen­ate Repub­li­cans, no­tably, did not re­move the tu­ition tax break — one of sev­eral con­tentious House changes they avoided.

“We shouldn’t be tax­ing tu­ition ben­e­fits,” Texas Sen. Ted Cruz said last month in a CNN de­bate. “It’s not in the Sen­ate bill. And I’m quite con­fi­dent it won’t be in the fi­nal bill.”

The tu­ition pro­posal, if it were to stick in the fi­nal bill, would af­fect about 145,000 grad­u­ate stu­dents and 27,000 un­der­grad­u­ate stu­dents, ac­cord­ing to the Amer­i­can Coun­cil on Ed­u­ca­tion. It would also af­fect other school em­ploy­ees who’ve used the break for them­selves or their fam­ily.

That’s be­cause it would delete a por­tion of the tax code that tax-ex­empts tu­ition re­duc­tions pro­vided to col­lege em­ploy­ees, in­clud­ing grad stu­dents who work by teach­ing or re­search­ing.

Democrats have pil­lo­ried the House GOP pro­vi­sion as part of a broader charge that the re­vamp would boost the wealthy over all oth­ers. Ses­sions, for in­stance, has been the tar­get of a TV ad from the lib­eral group Not One Penny that says he’s sup­port­ing a give­away to the rich.

And many grad stu­dents in Texas and be­yond have made clear that the tax-free tu­ition re­duc­tion is make or break.

“This is a huge deal,” Court­ney Lacy, a doc­toral stu­dent at SMU, told The Dal­las Morn­ing

News last month. “It’s the rea­son that I’m able to go to grad­u­ate school at all.”

Some higher ed­u­ca­tion ex­perts have sug­gested that uni­ver­si­ties might be able to limit the po­ten­tial pain by sim­ply re­clas­si­fy­ing the tu­ition waivers as tax-free schol­ar­ships. But many oth­ers said that schools would be limited by both le­gal and fi­nan­cial fac­tors.

Given the on­go­ing push­back — in­clud­ing protests this week in Texas and in D.C. — law­mak­ers might be keen to just keep the tax ex­emp­tion on tu­ition re­duc­tions.

The six other Tex­ans sign­ing onto the let­ter to “strongly op­pose” the tu­ition tax change were Reps. Jodey Ar­ring­ton of Lub­bock, Michael Burgess of Pi­lot Point, John Cul­ber­son of Hous­ton, Blake Far­en­thold of Cor­pus Christi, Bill Flores of Bryan and La­mar Smith of San An­to­nio.

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