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GOP Tax Plan Rattles Higher Education, Renews Charges of Elitism

Several AAU presidents are quoted in this Politico story on "what some observers say is a growing culture war on a higher education system seen as elitist and out of touch."

Polling that shows declining public support for higher education and Congressional Republicans' plans to slap unprecedented new taxes on higher education have left college leaders shocked and scrambling, the story says.

 "I don't think anybody expected this," Tulane President Mike Fitts said. "I don't think a month-and-a-half ago anybody expected this many and this level of changes in the support for higher education in the United States."

Rice University President David Leebron said, "We're being challenged on all of these fronts, and we see that reflected for example in the tax legislation. We're being out-demagogued by folks who just want to talk about how wealthy we are rather than what we use those dollars for."

College leaders are most worried about the House GOP's plan to tax as income tuition that schools now waive for graduate students working as teaching or research assistants. The provision could more than triple some students' taxable income, the story says.

"You're just going to have fewer graduate students. You're going to strangle the educational enterprise," Vanderbilt President Nicholas Zeppos said. "Why would you tax people — particularly when you're falling behind in STEM areas — to get advanced training?"

College leaders also decried the House's plan to eliminate a student loan interest deduction.

Another troublesome proposal — especially elite colleges and universities — is a provision that would tax private university endowment earnings. It would affect between 60 and 70 schools. 

"It's a very discriminatory, ill-thought-out proposal, which actually creates distinctions that don't make any sense at all," said Rice University President David Leebron. "The proposal literally makes no sense, as a coherent addition to the tax code, and represents a federal intrusion into universities that I think will only have adverse consequences."

Zeppos said the endowment tax would dimish Vanderbilt's efforts to provide financial aid to students, explaining that $90 Million of the $250 million the university currently spends on financial aid comes from its endowment.

"Now in effect, I've sent 200 scholarships to the federal government," he said.

Read the full article.