Note: This story was updated on December 14 to reflect the progress of the tax legislation.
When the House of Representatives passed its tax bill late last month, provisions that would have had a direct impact on higher education in the United States were met with scrutiny, anxiety, and action by students and universities. The Senate bill, which passed in early December, did not include many of the most concerning provisions, and the final bill, agreed to by House and Senate Republicans and now nearing a vote, preserves the tax-exempt status of graduate student tuition waivers and does away with the House bill's most serious impacts on higher education.
But the changes that were floated during the tax rewrite still raise questions about why lawmakers seemed willing to target higher education — and how colleges and universities can do a better job of demonstrating their value to taxpayers.
Before the final bill was agreed upon, we spoke with James Soto Antony, who directs the higher education program at the Harvard Graduate School of Education, about the ramifications of the proposed tax changes and the significance of the legislative debate for higher education leaders.
Why is it thinkable to consider policies that could prevent people from pursuing higher degrees, potentially damaging America's entrepreneurial, research edge?
It is hard to understand why the House bill taxes, or takes aim at, deductions intended to support students. Their proposed treatment of tuition/fee waivers as unearned income would clearly present a burden to students. We will have to see what elements make it into the final legislation as things develop. But, in all, students and universities were right to be anxious, and higher education is not out of the woods yet. Either way, both tax plans have elements that will require universities to figure out how to work within the new tax structure to support students and their institutions.