Congressional Republican plans to overhaul the tax code are raising concerns among officials worried about the impact that some of these provisions might have at GW.

A tax reform proposal, introduced earlier this month in the House of Representatives, would eliminate tax deductions that help students pay for tuition and classify tuition support for graduate students as taxable income. If enacted, officials and experts said those measures could discourage graduate enrollment and make GW less affordable.

Graduate students said the proposal to tax tuition support, included in the House bill, could cost students already facing steep financial obstacles roughly $3,000 more a year.

Republican supporters of the bill said the proposal as a whole will offer sweeping tax cuts to millions across the country and that the provisions impacting universities will raise more than $3 billion in tax revenue.

Last Friday, the Senate introduced its own tax reform proposal, which leaves in place deductions that give students paying back loans $2,500 a year in tax breaks. Those deductions were eliminated in the House version.

GW will not be affected by a controversial proposal to tax endowments at private universities because GW does not have a large enough per-student endowment to meet the tax threshold.

Higher education groups have rallied in opposition to the proposal. Last week, 45 higher education organizations signed a letter asking Congress not to pass the legislation because it would hurt students and universities.

Graduate students ‘take a hit’
During a presentation to the Faculty Senate Friday, Joseph Cordes, an economics professor and the chair of the Faculty Senate’s finance committee, said there is “no way we won’t take a hit” if measures impacting graduate students are included in the final bill.

If tuition support becomes taxable income, students would be taxed on both their tuition and their University stipend, likely adding thousands of dollars to their annual tax bill. Cordes said the University will either be forced to let students “eat” the tax – potentially discouraging students from enrolling – or raise the amount of money given to those students, which would cut into GW’s revenue.

“Let’s assume it passes, qualitatively we could have an effect, graduate students can’t afford it,” he said.

Graduate enrollment is vital to the financial well-being of GW, an institution reliant on tuition to fund about 70 percent of its operating budget. When graduate enrollment missed projections between 2013 and 2015, it led to a University-wide budget crunch and several rounds of spending cuts.

Graduate students comprised 58 percent of GW’s total student population in 2016, according to the Office of Institutional Research and Plannng.

Provost Forrest Maltzman said at the Faculty Senate meeting the impact on the University would depend on which proposals are included in the final bill if it passes.

“We have a House bill that is really, really problematic,” he said. “But in the Senate bill the taxation of graduate students stipends, the deductibility of students loans, they are not touching that in the same way that the House bill did.”

University spokeswoman Maralee Csellar said officials are “monitoring the proposed legislation.” She said it was too early to tell what provisions will be approved or how they will impact GW, but certain measures in the proposal were worrisome.

“We, like many in the higher education community, are concerned about the implications that the elimination of some tax credits for student loans could have on students and families, making college less affordable for many,” she said in an email.

She said the University is receiving regular updates from groups like The American Council on Education and the National Association of Independent Colleges and Universities, for which GW is a member school. Both groups are lobbying against the bill.

Paul Musgraves, a professor of political science at the University of Massachusetts Amherst, said the change would be particularly harmful if it dissuades students from attending graduate school and training to become the next professors and academic leaders.

Taking about $3,000 per year out of their already tight budgets is “cruel,” he said.

“Taxing those people more, and especially taxing those who are trying their hardest to succeed in an industry that already puts a number of obstacles in the way of a number of researchers who want to join the academy, that’s why I say it’s ill-advised or cruel,” he said.

He added that taxing graduate stipends would incentivize American students to go to other countries to get their education, which means that universities would lose some of the most gifted graduate students.

Andreas Meyris, a Ph.D student in the history department, said graduate students, who are already often overworked and underpaid, would struggle to support their families and have difficulty paying to attend conferences if they are forced to pay taxes on their stipends.

Meyris said he lives on a $24,000-per-year stipend, which already makes it difficult to afford the high cost of living in D.C.

“Day to day, D.C. is a very expensive place to live,” he said. “If it’s as large of a hit as it’s currently suggested, it’s going to be hard to pay rent and buy groceries.”

In September, a group of graduate students launched an effort to form a union, raising concerns about stagnant wages, unequal pay among peers and costly health insurance.

Impact on fundraising
Another provision in the House bill would increase regulations on what charitable contributions can be counted as tax breaks, which experts said could have a negative impact on fundraising, giving donors fewer tax deductions for their gifts to all nonprofits, including GW.

The University has depended on philanthropy in recent years to grow its endowment and fund student scholarships and academic projects without large increases in tuition.

Cordes said fundraising might drop by 10 to 13 percent if the bill passes.

“It’s not that people won’t give if they can’t claim the deduction,” he said. “They’ll give, but they’ll just give less.”

Taxing high earners
The GOP proposal also implements a 20 percent tax on salaries of university employees over $1 million a year.

Cordes said the tax is largely a “symbolic” measure meant to reflect GOP concerns about large salaries for nonprofit executives that would not have a significant impact at GW.

In fiscal year 2016, the most recent year for which data is available, three employees were compensated more than $1 million, according to tax documents. Two other employees were paid more than $900,000.

“It’s a signal some people think executive of nonprofits shouldn’t be making those kinds of salaries,” he said.

Jessica Sebeok, an associate vice president and counsel for policy at Association of American Universities, said taxing compensation at universities would take incentives away for talented campus leaders to stay in the nonprofit sector.

“In private companies you want to be able to attract the best people,” she said. “These are often people who could make a lot more money if they were to do something similar for a for-profit organization.”

Annie Dobler and Leah Potter contributed to reporting.