NAICU Washington Update

House Holds Hearing on College Access

July 01, 2021

In an unusual move, the Oversight Subcommittee of the House Ways and Means Committee, which has jurisdiction over tax policy and the higher education tax benefits, held a hearing on expanding access to higher education that focused on funding, college costs, completion, and student loan debt – issues outside the subcommittee’s typical purview.   
The opening statements from Subcommittee Chairman Bill Pascrell (D-NJ) and Ranking Member Bill Kelly (R-PA) stated their mutual concern for access to higher education, cost and student debt.  Rep. Pascrell stated support for the elimination of student loan debt, while Rep. Kelly opposed both free college and the elimination of loan debt by the federal government.
Witnesses included an analyst from the Center for American Progress, a faculty member specializing in higher education policy, the president of Passaic County Community College, the president of Western Governors University, and Dr. Susan Whealler Johnston, the President of the National Association for College and University Business Officers.  Testimony ran the gamut from supporting federal investment in colleges and universities and increasing the Pell Grant to expanding tax benefits and ways to address student loan debt.
Dr. Susan Dynarski, a professor at the University of Michigan, was the only witness that spoke directly against higher education tax benefits, stating that “the current tax incentives only help wealthy students attend private colleges.” (The most generous higher education tuition tax benefit, the American Opportunity Tax Credit (AOTC), has an income cap and limits the benefit to single taxpayers earning less than $80,000 annually, and to $160,000 for married/joint filers.) She advocated for direct cash payments to the lowest income students to pay for college. 
Rep. Lloyd Doggett (D-TX) agreed with the need for federal financial support via the Pell Grant, but argued that the Ways and Means Committee has jurisdiction over tax benefits not Pell Grants, and that expanding benefits like the AOTC will help many lower and middle-income students and families.
Dr. Johnston thanked members of the committee for the Congressional support of colleges and universities across the country during the pandemic, asked for the repeal of the endowment/net investment income tax on private, nonprofit colleges, and expressed support for increasing the Pell Grant.  Of particular note, she addressed cost and aid stating that 99% of private college students receive institutional aid that covers half of their cost of attendance.

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