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Minor changes to the Senate tax bill meant to benefit students and teachers haven’t lessened the concerns of education groups who say tax increases in the measure would lead to fewer services and financial aid for students.
The latest version of the Senate bill would double the amount of deductions teachers can take for purchasing supplies and equipment for their classrooms from $250 to $500—a deduction that was eliminated in the House bill.
The Senate bill would also give tax-exempt status to student loans that were forgiven in cases where a borrower died or was disabled.
However, the bill keeps numerous provisions K-12 schools and colleges have railed against, including a tax on endowments that would levy a 1.4 percent tax on net investment income for universities with more than 500 tuition-paying students and an endowment of at least $250,000 per student.
Steven Bloom, director of government relations with the American Council on Education, said many schools use their endowments to help fund financial aid programs and the provision was “bad policy and terrible precedent.”
“All it would do as structured is send money from colleges and universities—which they would otherwise use to help students and provide education resources to them—and send it to Washington,” he said.
Colleges, including those affiliated with the Association of Public and Land-grant Universities and the Association of American Universities, are also concerned about being taxed for the income made licensing the use of their logo and school name.
“The ultimate impact of these measures would be fewer resources for public universities to devote to education, research, and community engagement,” the APLU wrote in a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Sen. Ron Wyden (D-Ore.), earlier this week.
Teachers unions and other advocacy groups for K-12 schools said the elimination of state and local tax deductions in the Senate bill would hurt state and local revenue which, in turn, could mean less money for public schools. As written, the bill would potentially risk funding for 370,000 education jobs, according to an analysis from the National Education Association.
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