This Week In Washington
Yesterday, House Republicans released their proposal to reform the tax code. Regarding higher education, the plan would remove tax liability for federal student loans that are discharged due to death or permanent disability, which under present law is taxed as income in the year the loan is discharged. It also proposes a 1.4% excise tax on the investment income of private colleges and universities. Finally, the plan proposes making changes to the American Opportunity Tax Credit and qualified tuition plans (commonly known as 529 college savings plans).
The Department of Education (ED) has begun offering voluntary buyouts to select staff working in the Office of Federal Student Aid (FSA). This separation incentive is a set payment made to those who choose to resign or retire early. This effort is in accordance with President Trump’s and Secretary Betsy DeVos’ stated mission to shrink the size of government.
News You Can Use
AccessLex Institute and the National Association of College and University Business Officers released a report examining the effects of tuition discounting on private law schools’ finances. The report finds that tuition discounting increased between 2015 and 2016 at participating institutions, resulting in a slight decline in net tuition revenue.
The College Board released a report which provides detailed analysis on the sources and distribution of grants, loans and other student aid for the 2016-17 academic year and examines how student aid funding has changed over time. The report finds, among other things, that in 2016-17 federal student loans constituted 63 percent of the aid for graduate students.
The following bills were recently introduced for consideration by the 115th Congress (2017-2018):
H.R. 4135 – Upward Mobility Enhancement Act [Rep. Jason Smith (R-MO)] would allow employers to offer tax-free education assistance of up to $11,500 a year to their employees.
S. 2028 – Protect Student Borrowers Act [Sen. Jack Reed (D-RI)] would require higher education institutions to repay a percentage of defaulted loans and provides incentives for institutions to implement comprehensive student loan management plans.