One thing most Americans can agree on is that our tax system is needlessly complex and in need of major reform to benefit struggling families across the nation. So it is surprising that tax reform starts from the premise that a bipartisan solution is not possible. While the provisions in the House bill are the most damaging, even a negotiated blending of the two bills could devastate our state’s colleges and universities and the communities they support.
Among its most harmful provisions, the House bill would eliminate the student loan interest deduction — a tax only on families who need to borrow money to cover college tuition. Additionally, the bill will institute a tax for any college employee, from a campus custodian to a college librarian, who receives a tuition benefit for their child’s education. The bill also removes tax-exempt bonds that colleges receive as non-profit institutions, severely threatening their financial health and the savings that they pass onto students and their families.
The House bill as passed undermines the ability of colleges and universities to support students needing financial assistance. It’s an affront to the Michigan residents who took on student loans to build a better future for themselves and their families, and on the small towns sustained by the jobs and economic growth the local college offers.
At Alma College, for example, 31 employees used either full or partial tuition remission for themselves or dependents either at Alma or through exchange agreements with other campuses — a total benefit for these employees worth approximately $850,000 for 2017-18. These employees include groundskeepers and secretaries who struggle to save for their children’s education and who rely on the benefit to put their children through college.
The benefits of higher education for students from low- and middle-class families are well-documented. In 2014, the PEW Research Center found that those with only a high school degree were nearly four times as a likely to live in poverty than their bachelor’s-degree-holding peers. If this bill passes, these positive effects will increasingly benefit only those families who can afford a college education without loans.
In our state’s rural areas, colleges and universities are a lifeline for local communities. Often, they are major employers, providing hundreds of jobs for residents. The ability to offer these jobs and give employees the best benefits possible — including tuition benefits for their children — would be damaged severely by the House version of the bill. Colleges are also a buoy for local businesses, from the small-town hardware store to the local construction firm. Weakening our state’s colleges would result in cutbacks to this kind of investment, a blow to local economies.
The Tax Policy Center found that more than half of the benefits included in this plan go to the top 1 percent. Let’s encourage our legislators to seek a bipartisan solution that would support increased opportunity for all Americans.
Jeff Abernathy, president