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Taxing College Endowments

Mary Sue Coleman, president of the Association of American Universities, responded to The New York Times article, "How a Tuition-Free College Turned Into a Casualty of the Tax War,." with the following Letter to the Editor:

To the Editor:

A Tuition-Free College Takes a Hit” (news article, Dec. 21) correctly identifies the polarized and flawed decision-making process in Congress. It misses the mark, however, by saying the goal of the 1.4 percent excise tax on certain private university endowment earnings is to encourage them to provide more funding for “financial aid and lower tuition.”

In fact, the tax includes no incentives for spending that would in any way make college more affordable. Rather, the tax is a blanket transfer to the federal government of funds that support student aid, research and other programs.

Targeting the endowment funds of colleges and universities that provide the most generous student aid packages undermines the goal of making higher education more affordable and accessible to all students. The rhetoric claiming that this tax is pro-student is simply that, and it is unfortunate that politics have come to outweigh sound policy decisions.

A version of this letter appears in print on January 1, 2018, on Page A18 of the New York edition with the headline: Taxing College Endowments.

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