Student Debt, College Endowments, and the Tax Code
Washington, D.C. — Yesterday, U.S. Representative Peter J. Roskam, Chairman of the Ways & Means Subcommittee on Oversight, held a hearing on tax-exempt college and university endowments.
Experts testified on the rising costs of higher education and how some institutions are using their tax-exempt endowments to fulfill their charitable purposes and reduce costs for students.
What they’re saying:
Janet Lorin, Bloomberg:
“This entrenched idea -- that is tuition has to go up and up and up every year
-- is not gospel truth,” Ways and Means Oversight committee chairman Peter Roskam, an Illinois Republican, said in his opening statement.
“Given the families’ concerns and the big tax benefits colleges and universities get from taxpayers, the Ways and Means Committee believes it is important for us to keep learning about how these schools are working to fulfill their charitable and educational purposes,” Roskam said.
Danielle Douglas-Gabriel, The Washington Post:
Rep. Peter Roskam (R-Ill.), chairman of the Ways and Means Oversight committee, asked whether the tax code should be used to encourage people to donate money specifically for scholarships at universities. He said there are already tax incentives for companies to contribute inventory donations that receive an added benefit if it helps the needy. Something similar could be applied to colleges, though Roskam stopped short of proposing any such legislation.
“We need to do some more exploring,” Roskam said of the incentive idea. “It doesn’t matter where you are on the political spectrum, everybody is agreeing that direct giving towards enhanced student aid and scholarships is a good thing.”
Benjamin Wermund, POLITICO:
Using the tax code to prioritize gifts that will help students afford college is the latest proposal by Republican lawmakers, some of whom think universities should be spending more of their wealthy endowments.
"That's an area I'll begin exploring," said the committee chair, Rep. Peter Roskam (R-Ill.) in an interview after the hearing. "If we recognize that directly helping students is - there's a premium that nearly everybody was putting on that today, witnesses and panels alike, both sides of the aisle. Since that's true, could we develop a consensus around that?"
Andrew Kreighbaum, Inside Higher Ed:
“When I go home to Illinois, parents tell me all the time about how they are struggling to put their kids through college and how they worry about their children’s future,” said Representative Peter Roskam, chairman of the oversight subcommittee.
Although the universities with the largest endowments were not represented among the hearing’s witnesses, those institutions were clearly on the minds of subcommittee members. Roskam said tax policy benefits those institutions, which can receive tax-free donations from alumni and other supporters, who themselves get a tax break from the contributions. Ways and Means isn’t typically one of the congressional committees that dominates higher ed policy, but as the chief tax-writing committee in the House, it could shape policy on university endowments. (It has also played a role in the past in creating college tax credits and other tax breaks.)
Colleen Murphy, Bloomberg BNA:
The subcommittee's chairman, Rep. Peter Roskam (R-Ill.), has praised Reed's efforts in developing the bill.
“Congressman Reed is taking a serious look at a serious issue, and he's taking the time to inquire and explore and probe and craft the best piece of legislation that he can,” Roskam told Bloomberg BNA after the hearing…
“We've got to widen the aperture on our discussion to make sure that we're getting this just right,” Roskam said.
Bernie Becker, POLITICO:
Rep. Peter Roskam (R-Ill.) mused at a hearing Tuesday about whether the tax code should give colleges more incentive to accept donations for scholarship programs, and not for student centers, sports programs and other areas where lawmakers have criticized universities' use of massive endowments.