Higher education groups blast House GOP tax bill Presented by Comcast

With help from Caitlin Emma, Michael Stratford and Kimberly Hefling.

HIGHER EDUCATION GROUPS BLAST GOP TAX BILL: Advocates for colleges and universities came out swinging Thursday against House Republicans’ plans to tax private university endowments and eliminate roughly $65 billion worth of tax benefits, including those for student loan borrowers and families paying for college.


— What’s on the chopping block: The deduction for interest paid on student loans; the deduction for college tuition; the tax break for tuition discounts that colleges give their employees; the tax break for all employer-provided educational assistance programs; and the Hope Scholarship Credit and Lifetime Learning Credit. Those two credits would be “consolidated” into the American Opportunity Tax Credit, which would partially expand eligibility to students and families pursuing a fifth year of higher education (it’s currently capped at four years).

— “This isn’t about good policy,” said Steven Bloom, director of federal relations at the American Council on Education. “This is about raising revenue, really on the backs of students.”

— Peter McPherson, president of the Association of Public and Land-grant Universities, said in a statement that the GOP bill “would have deeply negative consequences for access to higher education, the cost of college, and efforts to develop the highly skilled workforce that is needed to propel our nation’s economy forward.”

— Also raising alarms: A new endowment tax: Private colleges would be subject to a 1.4 percent excise tax on the net investment income of their endowment. The provision would apply only to private -- not public -- schools with at least 500 students and total assets valued at $100,000 per full-time student.

— Some critics of university endowments had previously focused on the amount that schools dip into their endowments to fund financial aid. But the Republican summary of the tax bill justified the new tax by saying that private universities should have “parity” with private foundations that are subject to the tax.

— About 160 institutions would be hit by the new endowment tax, according to Bloom. “It just takes money from these institutions that will be hit and sends it to the federal government,” he said.

IT’S FINALLY FRIDAY AND THIS IS MORNING EDUCATION. This weekend I’m jetting off to Atlanta (via commercial airline) to see what all the buzz is about. What’s the one thing I can’t miss? Drop me a line: [email protected] or @MelLeonor_ . Send events to: [email protected] . And follow us on Twitter: @Morning_Edu and @POLITICOPro .

OTHER WINNERS AND LOSERS OF THE TAX REFORM PLAN: The House GOP tax plan touches on a wide array of education issues. Here’s a look first at the winners, though some with caveats:

— Private schools: Both public school advocates and some school choice supporters think the House GOP tax bill would only help wealthy families attend private school. The bill would end Coverdell Education Savings Accounts — tax-free accounts that have allowed families to set aside up to $2,000 to cover K-12 costs, like private school tuition — and expand 529 college savings accounts to cover K-12 expenses of up to $10,000 per year at public, private and religious schools. Coverdell accounts are income-restricted, applying to families in lower tax brackets, while 529s are open to everyone, no matter how wealthy. More from Pro’s Caitlin Emma.

— Groups opposed to abortion rights: The bill would specifically open up 529s to include “unborn children” as designated beneficiaries, which a bill summary defines as “a child in utero. A child in utero means a member of the species homo sapiens, at any stage of development, who is carried in the womb.” Groups on both sides of the abortion debate squared off over the provision, opening a new front in the push to grant legal rights to a fetus. More from Caitlin .

— Early learners: Advocates for early education met with relief the news that the child and dependent care tax credit was left untouched in the House GOP tax plan. The credit is largely claimed by working families with children not yet in school and covers daycare and preschool expenses. Still, since child care costs continue to rise for many families, the news is hardly a victory. “We are relieved that it has been spared. But at the end of the day, if it’s going to help families, that tax credit should be expanded,” said Charles Joughin of the First Five Years Fund. Save the Children Action Network President Mark Shriver said the plan fails to live up to Trump’s campaign promise. The House plan does bump the child tax credit from $1,000 to $1,600, but doesn’t go as far as Ivanka Trump and Sen. Marco Rubio (R-Fla.) had advocated. Rubio said this week that due to inflation, anything but doubling the tax credit won’t significantly help working families.

And then there are the losers:

— Tax credit scholarship supporters: Unsurprisingly, the bill doesn’t include a tax credit scholarship proposal that could expand school choice for millions of working-class families — something that Education Secretary Betsy DeVos and certain school choice advocacy groups had wanted. A spokesman for the American Federation for Children, the group formerly chaired by DeVos, said the organization supports expanding 529s to cover K-12 costs but is also “concerned about and focused on those families who do not have 529s, who are looking for more and better educational options for their children.”

— Teachers: They will no longer be able to claim a $250 deduction for money they spend out of their own pockets on classroom supplies and instructional materials. "As educators spend more and more of their own funds each year to buy basic essentials, Republican leaders chose to ignore the sacrifice made by those who work in our nation's public schools to make sure students have adequate books, pencils, paper and art supplies," said Lily Eskelsen García, the president of the National Education Association. A Republican summary of the tax plan says an increase in the standard deduction will offset the loss of the deduction, while simplifying the tax filing process.

— Undocumented families: A clause in the House Republican tax bill would block most undocumented immigrants from claiming child tax credits and tax credits for college expenses, Pro’s Ted Hesson reports. “Under current tax law, an undocumented immigrant can file taxes with an Individual Taxpayer Identification Number, or ITIN, in lieu of a Social Security number,” Hesson writes. Under the House Republican bill, ITIN would no longer be acceptable to claim child tax credits or the American Opportunity Tax Credit that covers college expenses. The change was proposed by the White House in its fiscal 2018 budget.

And the mixed verdict:

— Public school funding: Republican leaders in September called for eliminating the state and local tax deduction known as SALT, which allows individuals to subtract from their federally taxable income some or all of taxes paid on real estate property, income, personal property and sales. Advocates say the deduction serves as an incentive, in the form of lower taxes, to pay state and local taxes for public education. But the House GOP bill released Thursday would keep the deduction on local property taxes and cap it at $10,000. Still, public school advocates say it could starve public schools of funding. Michael Dannenberg, director of strategic initiatives for policy at the nonprofit Education Reform Now, estimates that it could "whack about $250 billion in support for public education over the next ten years."

HOUSE DEMOCRATS RESPOND: Rep. Bobby Scott, the ranking Democrat on the House Education and the Workforce Committee, said: “Voters of both parties want Congress to lower the cost of college and put more money, not less, into public education. And yet, House Republicans are proposing to fund tax cuts for corporations and the wealthiest Americans on the backs of students, teachers, and communities.”

LOCAL GOVERNMENT REGAINS CONTROL OF PHILLY SCHOOLS: Philadelphia Mayor Jim Kenney has assumed control of the Philadelphia school district — calling for the dismantling of the state-controlled oversight commission and assuming responsibility for the $103 million budget deficit the district faces next school year. The state has controlled Philadelphia’s public schools since 2001 amid financial instability. The commission is expected to dissolve itself by June 30, with the backing of state education officials. Kenney said he plans to appoint a nine-member school board by March to assume office once the commission has been dismantled.

— “Again and again, we’ve told the people of Philadelphia that the state of their schools are someone else’s responsibility,” Kenney said Thursday. “That ends today. When the SRC dissolves itself, and we return to a school board appointed by the mayor, you can hold me and future mayors accountable for the success or failure of our schools.” More from the Philadelphia Enquirer.

SCOOP: ED FLOATS BUYOUTS: The Education Department has offered buyouts to 255 employees, Pro’s Kimberly Hefling first reported Thursday. The department currently employs 4,400 people, and employees are typically offered up to $25,000 to retire or separate early. Read more.

DEVOS SEEKS DOLLARS FOR HURRICANE RELIEF: The Education Department is asking for $2.7 billion in hurricane relief for K-12 schools and higher education institutions in Puerto Rico and the Virgin Islands, according to a document obtained by POLITICO. A plan submitted to the Office of Management and Budget by the agency would provide a funding boost that could be used to reopen schools and help students displaced by Hurricanes Harvey, Maria and Irma. The proposal comes after more than 60 House members signed onto a letter last week urging DeVos and OMB Director Mick Mulvaney to boost funding for schools affected by hurricanes there. Kimberly Hefling reports .

GEORGETOWN GRADS PETITION UNIVERSITY FOR UNION: Graduate student workers at Georgetown University are asking university leaders to voluntarily recognize them as a union, saying they have majority support for one. In a letter sent to university officials, the Georgetown Alliance of Graduate Employees told President John J. DeGioia that half of all graduate students had signed cards signaling their support to organize under the American Federation of Teachers. A university spokeswoman said leaders are reviewing the request.

MOVERS AND SHAKERS

— Jordan Posamentier has left the position of deputy policy director at the Center on Reinventing Public Education, a school reform group, to serve as senior manager for policy and advocacy at the nonprofit Committee for Children.

— Alexandra Mane will join the National Board for Professional Teaching Standards. Mane comes from the Posse Foundation, where she served as national director of development.

REPORT ROLL CALL

— A new study from the Center for Empowered Learning and Development with Technology found that black teens benefit from online race-related social interactions.

SYLLABUS

— This week’s terror attack in NYC trapped two students inside a school bus. The next day, one returned to school: Chalkbeat .

— AltSchool, backed by Mark Zuckerberg and other high-profile tech investors, is scaling back and shutting a school as losses pile up: Bloomberg .

— Choice is shaping Indianapolis Public Schools as thousands of families enroll their children in private, charter and township schools: Chalkbeat .

— North Carolina legislators begin school funding formula rewrite: The Associated Press .

— New NAACP president speaks on education and charter schools: The Sacramento Observer .

— Racist ads call for deporting Asian-American school board candidates in New Jersey: The Huffington Post .

— Education, pensions top priorities in Colorado governor’s budget: The Associated Press .

Stockholm . Follow the Pro Education team. @caitlinzemma ( [email protected]), @khefling ( [email protected]), @mstratford ( [email protected]), @BenjaminEW ( [email protected]) and @MelLeonor_ ( [email protected] ).

Follow us on Twitter Jennifer Scholtes @JAscholtes



Michael Stratford @mstratford



Nicole Gaudiano @ngaudiano



Bianca Quilantan @biancaquilan



Juan Perez Jr. @PerezJr