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‘An all-out war on higher education’ Iowa university presidents pen letter, students protest against tax-reform bill
Vanessa Miller
Nov. 29, 2017 4:46 pm, Updated: Nov. 29, 2017 7:27 pm
IOWA CITY - Higher education-related provisions in the House version of a federal tax reform bill have incited student protests and prompted Iowa's public university presidents to co-pen a letter to the state's congressional delegation warning, 'We are deeply concerned.”
'There are provisions of the bill that would discourage students from pursuing higher education, increase the costs for students and their families, and jeopardize our campus' ability to operate cost-effectively,” according to the letter University of Iowa President Bruce Harreld, University of Northern Iowa President Mark Nook, and Interim Iowa State University President Ben Allen sent earlier this month.
When UI graduate students grabbed a megaphone Wednesday and took to the Pentacrest to protest the proposed Tax Cuts and Jobs Act, Harreld was present, distributing the letter he signed.
'This university works because?” UI graduate student Landon Elkind shouted to a crowd of his peers. 'We do,” they yelled back.
UI students are not alone in their activism, as students across the country likewise have voiced opposition to a proposal they say threatens to upend legal provisions and resources aimed at supporting low- to middle-income students and incentivizing graduate education.
Primary concerns outlined in the presidents' letter include the proposed elimination of the Lifetime Learning Credit and the Student Loan Interest Deduction, which lets individuals with income up to $80,000 who are repaying student loans deduct up to $2,500 in loan interest paid. In 2014, according to a Washington Post report, 12 million borrowers benefited from the provision, and ending it could raise student loan costs by about $24 billion.
The presidents also express concern about the proposal to repeal a portion of the current law that exempts tuition waivers as a taxable form of income to employees - including graduate assistants who have tuition waivers as part of their academic program.
That, according to the letter, would affect more than 8,000 graduate and professional students across Iowa's public universities, and it would increase tax liability per student by between $3,000 and $10,000 - depending on the employment terms.
Full-time graduate assistants at UNI get an average stipend of $5,450 a year.
'Increasing their tax liability would result in a net loss of income,” according to the letter.
The University of Iowa in the 2016 academic year provided $24.9 million in tuition scholarships under the threatened section of existing law, according to spokeswoman Jeneane Beck. Repealing tax benefits associated with those scholarships would affect about 2,818 graduate students over the course of an academic year, according to Beck.
In addition to the varying effects of repeal on students, the potential tax impact for the university would reach $1.9 million.
'The repeal,” according to the presidents' letter, 'would serve as a significant disincentive to pursuing graduate education and undermine our ability to prepare highly specialized professionals to meet the economic and workforce needs across Iowa.”
The institution heads in their message also addressed part of the proposed bill that would either nix or inhibit the Board of Regents' ability to issue advanced refunds that refinance existing debt at lower rates.
Right now, interest on advanced refunding bonds issued by the regents is tax-exempt when proceeds are used to refinance outstanding tax-exempt bonds. The proposed tax-reform act would repeal that tax-exempt status.
'The net present value savings realized from the interest rate savings of these issues for the regent institutions totals over $63.7 million since 2012,” according to the letter. 'The elimination of the tax-exempt bond option will limit our ability to modernize education and research facilities, stunt growth, and drive up costs for students.”
In a separate letter to congressional leaders from the UI Graduate Student Senate, Graduate and Professional Student Government, and its graduate student union, the critics laid out their reasons for strong opposition to the tax proposal.
Specifically, the reform means a typical UI graduate student could - on a stipend of about $19,000 - be responsible for nearly $30,000 in taxable income.
'Most graduate students would see a tax increase of between 200 and 400 percent,” according to the student letter. 'Additional expenses would discourage domestic and international applicants from U.S. universities in favor of less expensive programs abroad, or exclude them from graduate education altogether.”
Both the students and presidents acknowledged in their letters the Senate version of tax-reform does not include the same repeals - creating more unknowns about what to expect. But Elkind during Wednesday's UI rally urged students to remain vigilant and continue calling lawmakers.
'Even if this provision doesn't make it into the final bill that passes … still give them a call to make your voices heard to remind them that if they ever try this again, we're going to be back,” Elkind said.
If the provision does make it into a final bill that passes, 'A lot of us will have to leave,” he said.
'I don't know if I could stay here with housing as expensive as it is, and my income as low as it is,” Elkind said. 'I don't know that I could stay in grad school with an extra $1,200 bucks a year in taxes.”
Bailey Kelley, president of the UI graduate student union, seconded that warning.
'I, for one, could not be here - could not continue as a student - if I had to pay taxes on my tuition and waiver,” said Kelley said.
'The stakes could not be higher,” said UI graduate student Scott Olson, 24. 'So just melt the phones of your senators.”
Sen. Joe Bolkcom, D-Iowa City, attended Wednesday's rally and applauded that call, reiterating the tax-reform criticism.
'It's an all-out war on higher education,” he said. 'It's outrageous what's going on. The foundation of our economy is educating folks, and this is making it harder for people to go to college, making it harder for these universities to operate - there are provisions that make it more difficult for these universities to pay off their debt for their facilities.
'It's an attack on higher education, and it shouldn't stand.”