Skip to Navigation

Federal Tax Legislation Update

December 5, 2017

Dear Graduate Students,

I’m writing to continue to provide updates on the comprehensive tax legislation being deliberated in the United States Congress. The House and Senate have now both passed versions of the Tax Cuts and Jobs Act, each version with varying implications for graduate students and the universities in which they are enrolled, as well as for faculty, staff and undergraduate students.

On Saturday, December 2, the U.S. Senate passed its version of the tax bill by a vote of 51 to 49. While the Senate bill includes a number of provisions contained in the Nov 16-passed House bill that would negatively affect the capacity of colleges and universities to advance their missions, it maintains the current tax-free treatment of tuition remission for graduate students, and excludes the provision included in the House bill that would treat this as taxable income.

The Senate bill also maintains the current student loan interest deduction, as well as the tax-free treatment of up to $5,250 in employer provided education assistance, both of which are eliminated in the House bill. Like the House bill, the Senate legislation imposes a new 1.4 percent excise tax on endowments held by private colleges and universities, with the modification that the tax would apply only to endowments valued at $500,000 per full-time student. The House version would apply to endowments valued at $250,000 per student. A document from the Association of American Universities available online offers a more detailed comparison of the House and Senate legislation.

While it is encouraging that some of the onerous proposals of the House bill are not included in the Senate bill, the process moving forward remains fluid, and the outcome uncertain. As a next step, the House and Senate will name representatives this week to serve on a Conference Committee charged with reconciling the differences between the two versions of the legislation and crafting a final bill for consideration by the full House and Senate. Congress has stated a goal to send a final, approved bill to President Trump for signature into law by late December, before the Congress’ holiday recess.

Advocacy remains critical, and the University continues to work directly with national associations and peer institutions, as well as alumni and other supporters to influence the outcome. We are vigorously making the case for doing all that we can as a nation to support access to high-quality, affordable graduate education and investments in research and discovery.  

Provost Richard M. Locke and the University Resources Committee also continue to assess the potential budgetary impact that any combination of the provisions of the varying tax bills may have on the FY 2018 budget under development. They are working to propose a range of scenarios to position the University to continue to advance academic excellence, make access to doctoral education independent of financial means, and support faculty and staff to fulfill the University’s mission.

I will continue to keep you apprised of any relevant activities or actions, and encourage you to continue to advocate with your members of Congress on this critical matter.

Andrew G. Campbell
Dean of the Graduate School