tax reform provisions that may impact higher education

On Nov. 2, 2017, the U.S. House of Representatives introduced its tax reform legislation and the U.S. Senate is expected to introduce its bill later this week. Congressional leadership aims to have its tax reform bill become law before Christmas 2017.

While the university has no position on tax reform legislation overall, we want alumni and friends to be aware of several items in the bill that — if passed — would have a significant negative impact on higher education, students and families. At a time when Congress and the American people are asking institutions of higher education to control cost increases, these provisions will put further pressure on colleges and universities, students, and families.

Marquette is in communication with congressional representatives, and we are also working with national and state associations on tax reform issues of concern.

A section-by-section summary of the House bill is available online, which includes additional provisions that may impact higher education.

House bill provisions that will negatively impact higher education:


1. Charitable Giving

The bill would double the standard deduction for those filing jointly to $24,400 and it would impose limits on charitable giving in a significant way.

Tuition only covers a portion of the costs of education; scholarship funding through the prudent distribution of endowment earnings via charitable giving significantly helps decrease the costs to students. In fiscal year 2017, Marquette distributed nearly $23.6 million in scholarship aid from endowment income and charitable donations.

2. Athletic Seat-License Donations

The bill repeals the 80/20 rule for Athletic Seat-License Donations, eliminating the current tax-deductibility on 80 percent of the total donation. These seat-license fees are a resource to raise funds for scholarships for student-athletes.

3. Endowment Tax

The House bill would impose a 1.4-percent excise tax on private university endowment earnings for institutions whose endowments total at least $100,000 per student. For Marquette, this would equate to an endowment of just over $1 billion. While such a measure would not impact Marquette at the moment, it would impact us in the future as we meet our endowment goals.

Endowments are catalysts for the many ways in which universities positively impact our world. They fuel academic and scholarly excellence and innovation, and increase affordability for students.

4. Tax-exempt Tuition Remission

Marquette has more than 500 master’s and doctoral students who are currently supported through some form of graduate assistantship (teaching assistants, research assistants and graduate assistants). Under the proposed legislation, all of this would be taxable income to the student.

If you are interested in sharing your thoughts on these provisions, please contact your Congressional representatives:


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