The impact of tax reform and Higher Education Reauthorization

By |2017-12-19T12:15:34+00:00December 12, 2017|Categories: Leadership, Membership|Tags: , , |

Update, December 19:

Tax reform: Last Friday, the conference committee convened to construct a compromise tax bill, after the House and Senate passed different versions, agreed to final terms. The House is excepted to vote on December 21. Forbes recently published a general overview of this conference bill. A higher ed focused overview can be found in the Chronicle for Higher Education. Notably, the provision to tax graduate students’ tuition waivers as income is not in this bill.

HEA: The 542-page PROPSER Act advanced out of committee in the late evening of December 12 and now must proceed to the full House for a vote. There has not yet been any companion legislation released by the Senate. While difficult to summarize such a lengthy document, a general overview can be found in US News and a more student affairs focused overview can be found on NASPA’s website.

NIRSA continues to monitor policy, legislation, and advocacy work that affects both the higher education and physical activity space. Like many of you, we are paying particular attention to the evolution of the Tax Reform Bill and the Higher Education Reauthorization Act.

Tax Reform Bill

As widely reported in the media, the House of Representatives approved its tax reform bill in mid-November while the Senate passed its version on December 1. On Friday, Congress announced the conference committee that will be responsible for crafting a compromise bill. The Washington Post provides a concise comparison of the two bills.

Higher education would be significantly affected by the tax bill. The American Council on Education (ACE) has provided a succinct “Summary of the Higher Education Provisions in the House Tax Bill” and a “Summary of the Higher Education Provisions in the Senate Tax Bill.” The National Association of College and University Business Officers (NACUBO) also offers an overview of the two bills’ provisions and their impact on higher education.

One of the most contentious areas of concern is the House bill’s plan to tax graduate student tuition waivers. Having tuition waivers taxed as income means students relatively small stipends would be impacted. For some current grads that impact could be enough to impede their ability to continue their programs. It could also form a barrier to prospective students’ entry. Importantly, this measure was not included in the Senate’s bill and therefore has the potential to not be included in the reconciled bill.

In early November, NIRSA pointed members to a NACUBO webinar aimed at helping explain the House bill and, in particular, its implications for higher education. In late November, NACUBO ran a second webinar expanding on these same core points. Both are recorded and are free to members. Since NACUBO membership is institutionally based, contact your institution’s business officer to find out more.

Higher Education Reauthorization

On Friday, December 1, 2017, Chairwoman Virginia Foxx (R-NC), chair of the House committee overseeing education issues, released draft legislative language for reauthorizing the Higher Education Act (HEA) by introducing the Promoting Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act (H.R. 4508).

HEA, which was originally created in 1965 to, as it stated, “strengthen the educational resources of our colleges and universities and to provide financial assistance for students in post-secondary and higher education,” was last reauthorized in 2008. That authorization expired in 2013, but was extended through 2016. Both the House and Senate have held hearings on the subject, but, until now, had not released any bill language or specifics.

The recently-released draft will likely go before the House Education and the Workforce Committees early next year. Voting on changes to include is expected to fall along party lines. The Senate is not expected to release its draft language until next year.

While there is demonstrated interest in Congress in the overdue reauthorization of HEA, there are questions around whether there would be enough time to achieve a compromise between prospective House and Senate bills as 2018 is an election year, limiting the congressional calendar.

While the final version of the bill is likely to look different from the PROSPER Act, it’s beneficial to understand which aspects of higher education have the potential to be changed. Both The Chronicle of Higher Education and The Wall Street Journal offer summary overviews of the bill.

 

  • For more information, please contact NIRSA Director of Advocacy and Strategic Partnerships Erin O’Sullivan.
Director of Advocacy & Strategic Partnerships at |

Erin O'Sullivan is currently the Director of Advocacy & Strategic Partnerships at NIRSA.