topSkip to main content

Menu, Secondary

Menu Trigger

Menu

Student Aid Tax Issues

Traditional nonprofit public and private colleges and universities historically have been granted tax-exempt status. This permits them to devote more of their resources to funding student financial aid, educational activities, academic research, and community programs to achieve their core missions of teaching, research, and public service.

In addition, the Federal Tax Code contains a number of provisions directed specifically at students and families, including various tax credits and deductions, that help make college more affordable and thus encourage greater access to and participation in higher education.

 

A number of provisions in the Tax Cuts and Jobs Act (H.R. 1) affect higher education. This matrix compares prior legislation with new legislation enacted under this tax reform bill.
Employer-provided educational assistance benefits (Section 127) allows employers to offer their employees up to $5,250 annually in tax-free educational assistance for undergraduate or graduate-level courses.
The Lifetime Learning Credit (LLC) is one of two income tax credits to help offset the costs of higher education.

The American Opportunity Tax Credit (AOTC) is one of two income tax credits to help offset the costs of higher education.

The Qualified Tuition Reduction, section 117 (d) of the Internal Revenue Code, allows nonprofit universities to give their employees, spouses, or dependents tuition reductions that are excluded from taxable income.
Learn more about the student loan interest deduction (SLID) and why it's important.

The Association of American Universities and other associations urged the Senate Finance Committee to include provisions in any upcoming tax reform package that help students save and pay for higher education, and manage their student loan debt.

The Federal Tax Code impacts colleges and universities' missions through provisions affecting aid to students; incentives for charitable giving; tax-exempt financing; UBIT; and the R&D tax credit.
A number of provisions in the Tax Cuts and Jobs Act (H.R. 1) affect higher education. This document compares new provisions of the Tax Cut and Jobs Act with tax reform plans proposed by the U.S. House and Senate and prior tax law.
Higher education associations share their views with the working group on several tax provisions which are important to college students and their families, as well as on charitable giving tax incentives, particularly the itemized deduction for charitable giving.