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House G.O.P. Tax Writers Take Aim at College Tuition Benefits

WASHINGTON — The moment the last of Fred Vautour’s five children walked across the stage as a Boston College graduate was priceless.

Not only did Mr. Vautour have the rare distinction of handing each of his children their diplomas, but he was also able to pay for their nearly 18 years of schooling by collecting trash, scrubbing toilets and mopping floors while the campus slept.

“As much as I struggled, it was incredible to be able to do that for them,” said Mr. Vautour, 64, who has worked the graveyard shift as a custodian at Boston College for 17 years. “I took this job for benefits, but never imagined this would be one of them.”

It may not be one for long — or at least could be severely curtailed. The sprawling House tax bill, set for a vote on Thursday, would tax the value of college tuition benefits conferred on thousands of university employees like Mr. Vautour, one of several provisions that would hit colleges, universities and their students, hard.

Republicans drafted the bill with the premise that it would simplify the nation’s tax code and cut rates for middle-income Americans. To help pay for the $1.5 trillion tax cut, lawmakers eliminated many individual tax breaks, arguing the overall plan would compensate for any lost benefits. The result: while many families and businesses would see tax cuts, a large percentage of undergraduates and graduate students would see their tax bills increase, some dramatically.

In addition to campus employees, many doctoral students would see huge tax increases, since the tuition that universities waive for them in exchange for working on campus as researchers and teaching assistants would be deemed taxable income. At expensive research universities like Stanford and Harvard, the new tax bills could swamp graduate-student stipends.

Fred Vautour put his five children through school by working the graveyard shift as a janitor at Boston College for 17 years. CreditKayana Szymczak for The New York Times.

And if students take out more loans to pay their new taxes, they would face another surprise: Under the House bill, interest paid on student loans — a deduction that more than 12 million people used in 2015 — would no longer be tax deductible.

“These benefits ensure the brightest and best in the country can continue to afford an education,” said Steven M. Bloom, director of governmental relations for the American Council on Education, which represents 1,800 college and university presidents across the country. “Congress is sending a clear message that they’d rather use that money for corporate tax breaks.”

The Senate bill being drafted this week leaves out most of the higher-education provisions in the House bill. The Senate bill also retains other smaller tax credits and benefits that the House sought to repeal, such as a nontaxable annual grant of up to $5,250 that employers can offer their employees.

All told, the House’s Tax Cuts and Jobs Act would reduce tax benefits and savings for college students by $65 billion over the next decade, according to an estimate by the education council.

House Republicans defend the higher education provisions as contributing to the tax bill’s larger economic goals.

“The Tax Cuts and Jobs Act is focused on providing tax relief and increasing take-home pay for Americans of all walks of life — including people working to pay off tuition and other education costs,” a House Ways and Means spokeswoman said in a statement.

By increasing household income, the bill overall would “provide more Americans with more opportunities of their choosing, including continuing education,” said a spokesman for the House Committee on Education and the Workforce.

“If I had to pay it, it would have been a killer,” said Mr. Vautour of his children’s tuition.CreditKayana Szymczak for The New York Times.
But students and advocates say the higher-education provisions actually undermine what is supposed to be the central aim of the tax overhaul: to bolster the middle class. Even some Republicans who praise the tax bill are uneasy about some of the higher education provisions. Representative Rodney Davis, Republican of Illinois, wrote the chairman of the House Ways and Means Committee, Kevin Brady of Texas, that tax-free assistance in higher education is essential.

“We can make an even bigger impact by taking this opportunity through tax reform to confront the impending student debt crisis and to address access to higher education,” he wrote.

More than 145,000 graduate students are attending college for free, according to an estimate by the education council. For these students, who are often living on minimum-wage stipends, working long hours, studying and attending classes, repealing the tuition tax break could have dire financial consequences.

For Dacen Waters, 26, who is in his fourth year of pursuing a doctorate in physics at Carnegie Mellon University, the House bill would impose about a $7,000 tax increase.

In Mr. Waters’s program, the Mellon College of Science grants students an annual stipend of $29,400 and a $43,000 tuition waiver. Under the current proposal, their taxable income would rise to $61,000 from $19,000. That would effectively cut students’ net stipend by nearly $10,000 a year.

“I already feel like I’m less of a student and more of an employee,” said Mr. Waters, who says that his day mostly consists of research. “And that includes living paycheck to paycheck. If I had to absorb this, I definitely wouldn’t be able to continue pursuing a degree.”

He said such an increase would force him out of school, and possibly out of a career.

“It’s pretty unheard-of to do anything in physics and not have a doctoral degree,” Mr. Waters said.

According to the education council, more than 60 percent of the students who would be affected are in science, technology, engineering or mathematics — research fields that have drawn the praise of Republicans, including President Trump, in recent months.

The Association of American Universities, which represents 60 research universities, including Carnegie Mellon, said the tax plan threatened the viability of their doctoral programs. The universities award nearly one-half of all American doctoral degrees and 55 percent of those in the sciences and engineering.

Its president, Mary Sue Coleman, said the tax proposals “will have dire consequences for Americans who rely on research universities for undergraduate and graduate education.”

If approved, the tax plan could take effect Jan. 1, a fast-approaching deadline for the thousands of families who would face unanticipated tuition bills.

“If I had to pay it, it would have been a killer,” said Mr. Vautour.

When he started at Boston College as a cook in 1994, he was making $10.65 an hour, and full-time tuition was about $25,000. His salary has doubled after 18 years and so has the college’s tuition, which now stands at $52,500. His children rounded out their financial aid with scholarships and small federal loans, and Mr. Vautour paid only about $3,000 per year for other expenses.

A survey by College and University Professional Association of Human Resources found that of 300 schools that had employees receiving the tuition benefit, 50 percent earned $50,000 or less and 78 percent earned $75,000 or less.

“It’s not going to hurt the people who can afford college anyway,” Mr. Vautour said. “These kinds of benefits, they’re either for the rich or the poor. It’s always the in-between people who get screwed.”

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