U.S. Senate bill would preserve tax-free tuition waivers for graduate students

Abstract

The U.S. tax reform package proposed by Senate Republicans would retain many of the tax benefits for undergraduate and graduate students that the GOP-led House of Representatives put on the chopping block. But the Senate measure also includes several key provisions strongly opposed by higher education groups, such as an excise tax on some private colleges with large endowments and the elimination of certain state and local tax deductions. The Senate bill “still places too much of the burden of fixing our outdated tax system on America’s nonprofit universities,” says Mary Sue Coleman, president of the Association of American Universities, which represents 62 institutions. Universities are disappointed that both versions of tax reform legislation would impose a 1.4% tax on investment income at private schools with endowments worth at least $250,000 per full-time student. The tax would affect up to 70 schools and raise an estimated $2.5 billion over a