馃攳
If you pay student loans, the GOP tax overhaul could affect you. Here鈥檚 how - YouTube
Channel: unknown
[0]
JUDY WOODRUFF: We return now to the Republican
efforts to overhaul the tax code.
[4]
Both the Senate and House tax bills are large
and complex pieces of legislation, and they
[10]
could affect key sectors of the American economy
and society that have not gotten as much attention.
[17]
One of those is the potential impact on higher
education, and that's our focus of our weekly
[22]
Making the Grade segment.
[24]
John Yang has the story.
[25]
JOHN YANG: Judy, the Senate and the House
tax bills could make higher education more
[30]
expensive for some students, though in different
ways.
[33]
The biggest changes are in the House bill,
which would end the deduction for interest
[37]
paid on student loans.
[39]
Some 12 million people used that deduction
in 2015, the last year reported by the IRS.
[45]
Danielle Douglas-Gabriel covers the economics
of education for The Washington Post, and
[50]
she joins us now from Hartford, Connecticut.
[52]
Danielle, thanks for joining us.
[54]
Now, the House bill does away with the deductibility
of student loan interest.
[58]
How does that work under current law?
[60]
DANIELLE DOUGLAS-GABRIEL, The Washington Post:
So, people who are paying down their student
[63]
loans can deduct up to $2,500 worth of interest
every year.
[67]
So folks who have higher balances tend to
benefit the most from this.
[72]
On average, people get about maybe $200 worth
of a deduction from this particular credit,
[77]
but it is fairly popular.
[79]
About three in 10 of the 44 million Americans
who have student loan debt take advantage
[85]
of this every particular benefit.
[86]
JOHN YANG: So a lot of people use it, though
it sounds like the benefit is relatively small.
[91]
DANIELLE DOUGLAS-GABRIEL: Fairly.
[92]
Still, for folks who are paying down their
loans while paying for a house and taking
[97]
care of their family, a lot of them say that
every little bit helps.
[101]
So they were pretty disappointed to see the
House want the take aim at this.
[105]
And I think those voices must have been heard
in the Senate, which decided not to take aim
[112]
at this particular tax benefit.
[114]
JOHN YANG: But it will be on the table when
they try to reconcile the two bills?
[118]
DANIELLE DOUGLAS-GABRIEL: Yes.
[119]
JOHN YANG: And then taxing tuition waivers
as income.
[124]
Tuition waivers, different from scholarships,
right?
[126]
DANIELLE DOUGLAS-GABRIEL: Yes.
[128]
So, tuition waivers are what universities
tend to offer their teaching and research
[132]
assistants in exchange for the work that they
do.
[135]
In addition to offering these students stipends
to cover the cost of living and such, they
[141]
also cover their tuition.
[143]
Now, what this would mean is someone who is
attending a program that costs, say, $30,000,
[150]
$40,000 in tuition would -- and also being
paid maybe, let's say, $20,000 of a stipend
[157]
a year, would instead of being taxed on that
$20,000 stipend, would now be taxed on the
[165]
full $50,000 to $60,000 of tuition waiver,
as well as that stipend.
[173]
So that could be a pretty substantial difference
for a lot of graduate students that are barely
[177]
getting by on the money that they're earning
so far.
[180]
So very many of them are concerned and a lot
of them started to mobilize and take their
[185]
concerns to Capitol Hill, and I think that's
another reason why we saw the waiver not make
[190]
it into the Senate plan.
[191]
JOHN YANG: And then one thing that is in both
bills is taxing some universities' endowments.
[196]
DANIELLE DOUGLAS-GABRIEL: Correct.
[198]
So, there is a proposal right now that would
impose a 1.4 percent excise tax on the net
[205]
investment income of universities, private
universities, that is, whose students -- whose
[211]
endowments are equal to about $250,000 per
full-time student.
[217]
This pretty much addresses maybe 60 to 70
schools.
[221]
It was initially -- when the House proposed
this particular tax, they had said $100,000
[227]
per full-time students, which would have affected
double the amount of schools, but there has
[232]
been a lot of lobbying around this particular
issue, because it's not only the Harvards,
[237]
Princetons and really big brand-name schools
that are affected by this, but some small
[241]
liberal arts colleges that are really concerned
about how this is going to affect their bottom
[246]
line and their ability to offer financial
aid to their students.
[249]
JOHN YANG: Is there a policy goal there?
[252]
DANIELLE DOUGLAS-GABRIEL: That's what's unclear
at this point.
[255]
So, when there was some discussion about taxing
endowments maybe a year ago, there were a
[260]
lot of -- there were hearings in the House
around the idea of perhaps getting universities
[267]
to ensure that more of their endowments are
used to help lower the cost of college.
[271]
So, this was at that point an affordability
issue.
[275]
Well, that piece is not a part of this legislation
whatsoever.
[278]
It's not like the money that they're taking
from these endowments is going to be used
[283]
to lower the cost of college by offering more
grants and scholarships.
[287]
It's just going to offset any other kind of
tax -- corporate tax decreases that we might
[292]
see as a result of these plans.
[293]
And a lot of people are very concerned about
that aspect.
[298]
Folks could wrap their heads around the idea
that we should incentivize universities to
[302]
spend more of their endowment money on financial
aid, but they can't necessarily wrap their
[307]
heads around the idea of imposing this tax
for the sake of helping corporations.
[312]
JOHN YANG: Danielle Douglas-Gabriel of The
Washington Post on the tax plans and higher
[316]
education, thank you very much.
[318]
DANIELLE DOUGLAS-GABRIEL: Thank you.
Most Recent Videos:
You can go back to the homepage right here: Homepage