On Dec. 2, 2017, Republicans passed their version of the Tax Cuts And Jobs Act, legislation which will have a negative impact on higher education finances for graduate students.
Graduate students will face taxation on tuition waivers. Rollins faculty and staff who receive tuition benefits stand to be taxed on said benefits. Those with student loans will no longer be able to deduct their student loan interest.
The House bill, scribed with last-minute, hand-written notes on different pages, proposes to eliminate the provision that allows private colleges (such as Rollins) to issue tax exempt bonds.
This elimination will increase the cost of borrowing when Rollins wishes to undergo a large-scale capital project such as facility construction or renovation.
“The short answer is that there are a number of provisions in the House bill that are profoundly ill-advised and create significant harm to Rollins,” wrote president Grant Cornwell when asked for his thoughts on the legislation.
The taxation of graduate student tuition waivers has been the greatest source of controversy in the national dialogue. The provision has been criticized from a variety of angles, the breadth of which indicates to the short-sighted nature of the decision.
“This would be a huge burden to graduate students and deter many from pursuing graduate studies. This would be a blow to the whole research enterprise of higher education and thus to a national strategic asset.” wrote Cornwell.
“I honestly don’t know how people are going to go to grad school,” said Dr. Paul Reich, professor and chair of Rollins' Department of English. “It just won’t be practical,” Reich continued. Reich noted that he personally would still attend graduate school if he were a student today, but it would cause a massive amount of student debt to loom over his head.
While many are, for good reason, primarily concerned about the House bill’s immediate effects on higher education, Reich also expressed concern about the long-term effects on higher education and academia. “I don’t know what they’re expecting the workforce to turn into." He also commented that increasing the cost of graduate level education will have major effects on what the professors of the future will look like.
In Reich’s view, a decrease in affordability would lead to an increase in student loans for future professors. An increase in student loans will, in turn, adversely affect the quality of professors’ work, as they will be focused on overloading their schedules to meet the financial burden.
He also expressed that creating a de facto class barrier to graduate school will have negative effects on the diversity of perspectives found in academia.
For higher education at large, the bill proposes to tax endowment earnings for universities with more than $250,000 in assets per student. While Rollins’ endowment does not meet this threshold, President Cornwell commented that the “proposal violates a long-standing principle that is part of the foundation of higher education finance.”
However negative, the effects of the proposal are not set in stone.
“The Senate bill pulls back from some of the more damaging proposals in the House bill, but the risk is that the ideas will persist when the House and Senate meet to hammer out their differences,” wrote Cornwell.
As Cornwell pointed out, the two bills must reconcile before the completed bill lands on President Trump’s desk. GOP congressmen and women hope to have a completed bill ready for Trump by Christmas.