GOP tax plan could impact LC students

By Gelsey Plaza

On Nov. 16, members of the Republican Party proposed a federal tax plan that, if passed, would impact students in colleges and universities across the country. The proposed tax plan would affect loan repayment, college savings and tuition benefits for graduate students. The bill passed through the House of Representatives in a 227 to 205 vote, with 13 Republicans voting against the plan; it did not receive support from any Democrats. On Nov. 29, The Senate voted along party lines, 52-48, to begin further debate on the tax plan.

According to the National Association of Student Financial Aid Administrators (NASFAA), the bill will eliminate deductions for student-loan interest payments and education expenses, repeal deductions that help part-time students and target private schools by taxing more of their investments and ending their use of tax-free bonds for construction projects––assuming serious amendments are not made

A North Carolina college administrator called it would be a “tax on education.”

According to The Associated Press, millions of Americans would lose the ability to deduct up to $2,500 in student loan interest under the tax bill.

Education advocates are highly concerned that this bill will make college less affordable.

President of the American Council on Education Ted Mitchell wrote a letter to Republican and Democratic leaders in the House stating that the bill would “discourage participation in postsecondary education, make college more expensive for those who do enroll and undermine the financial stability of public and private, two-year and four-year colleges and universities.”

However, supportive Republicans argue that their tax cuts would create tremendous growth. Companies and individuals would have more to spend and invest, stimulating economic expansion and job creation. According to the New York Times, the Republicans are “aggressively marketing their plan as a ‘middle-class tax cut’ that would benefit everyone.”

Lewis & Clark Director of Financial Aid Anastacia Dillon said that of the proposed changes, the elimination of the student loan interest deduction could have the greatest impact on students at LC and across the nation. If passed, it would impact recent alums as well as current students once they start repaying student loans. Dillon thinks that another negative impact could be the taxing of endowment earnings.

“We currently use the earnings on scholarship endowments to help fund the financial aid grants and scholarships we offer to students,” Dillon said via email. “It would be difficult if we needed to pay a portion of that in taxes because that would leave less to help fund grants and scholarships.”

Dillon said that another possible issue involves education tax credits, and that this could financially burden families.

“There are some proposals that would eliminate or change education tax credits for families,” Dillon said. “Many of their parents may be using these tax programs to reduce their taxes and therefore have more money available to pay toward the cost of school.”

According to Lisa Meyer, LC Dean for Enrollment and Communications, a more apparent effect will be the elimination of a current provision that allows low and middle-income student debtors to deduct up to $2,500 annually in student loan interest.

“Additionally, people whose employers cover a portion of their college costs would now see this benefit as taxable income,” Meyer said via email. “For graduate students who provide research or teaching in exchange for tuition, the cost of tuition would now be considered taxable income. The cost of college will increase for many students.”

ASLC Chief Justice Natalie Souders ’19 thinks that there will be a huge variation in outcomes, and students will be affected differently. Unfortunately, lower income students will face the most difficulty. Souders hopes that LC will be able to take proactive measures to help low-income students.

“Because low income students are a vital aspect of our campus community, I hope LC will be able to offer additional financial aid to those who will be most negatively affected,” Souders said. “Our campus must recognize that the goal of this tax plan is to limit the opportunities of low-income people, and that, if left unchecked, could lead to less diversity at LC.”