Yesterday, on a largely party-line vote of 227-205 (13 Republicans joined with Democrats to vote no), the House of Representatives approved its tax reform legislation. Later in the day, the Senate Finance Committee voted to advance its own tax reform package. The full Senate will consider the bill after Thanksgiving.

If Senate Republicans are able to address concerns from within their caucus and gain support from 50 senators, their package will pass. At that point, the House will either accept the Senate bill -- if it appears that it's the only package that can win Senate approval -- or enter into a negotiation to find a bill that can make it through both chambers. Both bills contain significant problems for students and public universities, including:

House Bill –

• Repeal of Lifetime Learning Credit without an equivalent increase to the other relevant credit (American Opportunity Tax Credit);
• Repeal of the Student Loan Interest Deduction;
• Repeal of the exclusion from income for qualified tuition reductions;
• Repeal of the exclusion from income for employer-provided education assistance programs;

Senate (Finance Committee) Bill –

• Elimination of some tax-exempt bond options, which will make it more expensive to renovate and build necessary facilities;
• Repeal of the deduction for college-age dependents;
• Repeal of the university exemption from unrelated business income tax (UBIT) for the sale or licensing of its logo or name;
• UBIT computed separately for each unrelated business or trade, preventing offset of liability by other components of the institution;

Senate (Finance Committee) and House Bills –

• Changes to the standard deduction and charitable deduction, which will reduce donations to universities;
• New 20% excise tax on compensation in excess of $1 million (salary and/or benefits) paid to the five highest paid employees; and
• Repeal of the deduction for the donations that allow the right to purchase tickets to athletic events.

House - Senate Tax Reform Comparison

Higher Education Groups' Tax Reform Letter to the Senate

Higher Education Groups' Tax Reform Letter to the House