The Republican tax bill passed by the U.S. House of Representatives yesterday could have a strong negative effect on Georgetown graduate students receiving financial aid.
The bill, proposed by House Republicans on Nov. 2, is aimed at reshaping the tax code, including reducing the number of income tax brackets from seven to four, lowering the corporate tax rate and repealing the estate tax by 2024. The bill passed in the House by a 227-205 vote.
This bill raises financial concerns for graduate students relying on federal benefits to finance their education.
According to Politico, the plan would remove nearly $65 billion in tax benefits, many of which finance programs that alleviate student loans and help students trying to finance their university education. The proposed bill would cut tax breaks that employers receive for programs that aid graduate students with their education. Additionally, the bill would remove the tax break colleges receive for giving tuition discounts to their employees.
According to Georgetown’s Office of Student Financial Services’ website, a first-year graduate degree can cost anywhere from roughly $64,000 to upwards of $113,000 per year.
Without significant financial aid, the cost of a graduate education at Georgetown can impose a heavy financial burden on many students. While the proposed tax bill would not completely remove graduate financial aid, it may significantly impact it.
For Ph.D. candidate Jewel Lipps (GRD ’22), the passage of the bill could mark a turning point in her education.
“I view this as having an apocalyptic impact on graduate student costs,” Lipps wrote in an email to The Hoya.
According to The Washington Post, the House’s version of the tax reform bill would eliminate Code 117 of the current tax law, which ensures that tuition support for higher-level education is not counted in calculations for gross income taxes of students.
Without the deduction, Lipps said her tuition costs would inflate her taxes, and she would be forced to pay taxes that would amount to nearly one-third of her income.
“If what I described above became my reality, I would have to drop out immediately,” Lipps said.
Additionally, the bill could impact families without documentation.
University President John J. DeGioia has openly expressed the importance of students without documentation to the Georgetown community.
“As a university located in our nation’s capital and animated by our Catholic and Jesuit identity, we are called to support all of our students, including our undocumented students,” DeGioia wrote in a Facebook post Nov. 21, 2016.
According to Politico Pro, the bill’s passage could cause a new wave of difficulty as a clause in the bill would restrict the American Opportunity Tax Credit. This credit offers up to $2,500 in higher-education expense coverage for undocumented students.
Rachel Pugh, senior director of strategic communications at Georgetown, said the university is concerned about the effects of the bill.
“Georgetown is committed to improving the affordability and accessibility of higher education and is opposed to provisions that undermine these values,” Pugh wrote in an email to The Hoya. “We have worked with other institutions of higher education to communicate our concerns—particularly with provisions in the tax reform bill that would make education more expensive for graduate students and provide less tax relief to families in affording tuition—with Members of Congress.”
The Office of Financial Aid, the Office of the President and the Office of the Dean for Georgetown’s Graduate School of Arts and Sciences declined to comment.
The bill is now set to proceed to the Senate, where it faces strong opposition from Democrats. After a process of adjustments, the Senate may ratify it, although the Senate’s own version of the bill includes major differences like a proposed repeal of the Affordable Healthcare Act’s mandate for individuals to purchase health insurance. The Senate’s version faces an uncertain future. With at least two senators — Ron Johnson (R-Wis.) and Susan Collins (R-Maine) saying they cannot support the current plan, Republicans may fail to secure a simple majority to pass the plan.