CONTENTS
CONGRESSIONAL ISSUES
- Senate Vote on Secretary of Education Nominee Scheduled for Monday
EXECUTIVE BRANCH
- Associations Urge IRS to Delay Changing Reporting Requirements
- DHS Publishes Final Rule on STEM OPT Program
CONGRESSIONAL ISSUES
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.
EXECUTIVE BRANCH
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 letter 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 expenses.
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 published 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.