AAU Weekly Wrap-up
March 11, 2016
SENATE VOTE ON SECRETARY OF EDUCATION NOMINEE SCHEDULED FOR MONDAY
The Senate is scheduled to vote on the nomination of John B. King, Jr. as Secretary of Education on Monday, March 11. Dr. King’s nomination was approved by
the Senate Health, Education, Labor, and Pensions Committee on March 9 by a vote of 16 to 6.
ASSOCIATIONS URGE IRS TO DELAY CHANGING REPORTING REQUIREMENTS
A group of higher education associations, including AAU,
sent a letter
to the Internal Revenue Service (IRS) on March 10 asking for a delay in changes to how colleges and universities report students’ qualified tuition and
related expenses, which determine their eligibility for certain tax benefits, including the American Opportunity Tax Credit. The National Association of
College and University Business Officers described the technical issues raised by the reporting changes in a February 29
to the IRS.
The change is designed to show how much students paid, rather than how much they were billed. Currently, when colleges and universities report to the IRS
on each of their students’ qualified tuition and related expenses, they typically use IRS Tax Form1098-T Box 2, which discloses the amounts those
institutions billed them for qualified tuition and related expenses. The new rules, enacted in December 2015 as part of the major end-of-year tax
and spending bill, require institutions instead to use 1098-T Box 1, and report payments received from students for qualified tuition and related
The problem for institutions is that most institutions are unable to modify their complex accounting software systems in time to meet the new requirements.
Furthermore, even if institutions had new reporting systems operating today, it would be too late, as many institutions have already used old systems to
bill students (during late 2015 and early 2016) for 2016 tax year educational expenses, and those systems do not allow for accurate Box 1 reporting.
There also are concerns that a number of issues make the Box 1 reporting method unduly complex and confusing for both institutions and taxpayers. These
include the misalignment between the academic year and the tax year, the timing of the disbursement of student aid, and particular institutional billing
cycles linked to academic periods.
DHS PUBLISHES FINAL RULE ON STEM OPT PROGRAM
The Department of Homeland Security (DHS) today
its final rule on the STEM Optional Practical Training (OPT) program. The new rule will take effect on May 10. Additional information and analysis will be
provided as they become available.
DHS also today unveiled the STEM OPT Hub, a new online information resource for students,
higher education institutions, and employers.
The OPT program enables international students who have earned degrees at accredited U.S. institutions to spend a year after graduation in paid employment
that complements their field of study. Universities are responsible for maintaining students’ visa records during this period, while employers are required
to develop and implement a mentoring and training plan for each student.
Students studying in science, technology, engineering, and mathematics (STEM) fields are permitted an extension beyond the one-year period. The final rule
will increase the extension period from the current 17 months to 24 months, allowing STEM students a total of 36 months of OPT.
Last November, AAU joined a group of 12 higher education associations in submitting comments on the rule to DHS. The associations expressed support for the
STEM extension from 17 to 24 months, and asked DHS officials to consider extending the OPT period for students in all fields of study, not just STEM.
The associations’ letter also detailed concerns about the complexities of compliance for students, employers, and universities, particularly the additional
burden on campus Designated Service Officers to manage and track the employment placements for OPT students.
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