UND eyes tax plan's effects on higher education
UND is closely watching a version of the Republican tax reform bill that could ultimately pull money from higher education.
University President Mark Kennedy said the House version of the bill being debated Thursday has a "range of issues" that have landed on the radar of school leaders.
"The general idea of tax reform is to lower the rates, but also to eliminate all of the special tax provisions there are for a wide range of organizations—and higher education could be one of those," Kennedy said.
One piece of the bill could see a major tax hike applied to graduate students across the country. Many of these students receive significant financial aid, sometimes to the extent of completely covering their cost of tuition. They also typically work for their universities as teaching or research assistants, for which they receive a stipend that is currently reported as taxable income. If the House version of the tax bill is signed into law, these students would then be required to also count their tuition aid as part of that pot, an outcome that would increase their tax burden while their actual take-home pay remains flat.
A request for comment from a UND graduate student association went unanswered, but Kennedy was concerned with the prospect of steeper taxes at a time when UND is looking to increase its output of Ph.D. candidates.
"It's either going to make us more expensive to provide stipends, because then we'd have to accommodate the tax burden that they would pay, or it's going to make being a graduate student less attractive," Kennedy said. "It is something that, for our graduate students and for growth of our graduate programs, would likely have an impact."
The possible hike for graduate students isn't the only piece of the bill of interest to UND. Kennedy said a different item in the House proposal could revoke tax deductibility for companies hoping to provide tuition reimbursements to employees going back to to school. The bill would also double the standard deduction for taxpayers, a situation that could make filing taxes easier and donating to nonprofits—such as universities—a less attractive option. As written, the legislation would also limit reductions in tax burdens for people with student loan interest.
Kennedy said many of these provisions are absent in the Senate version of the bill, which he had a higher expectation of being signed into law. But when taken as a whole, he said, the impact of the reform package on higher education will rest on comparing the bite of losing favorable tax provisions to the growth stimulated overall in the U.S. economy.
"Whether it offsets for every organization remains on the balance, but clearly if there's a more vibrant economy there could be a benefit, tangentially, to (UND)," Kennedy said, cautioning that much of the legislative process remains to be seen. "Doing tax reform is one of the most difficult tasks that a Congress can take on, so one ought not to consider any of this certain."