To: Senator Mitch McConnell (R-KY); Senator Charles Schumer (D-NY); Representative
Paul Ryan (R-WI); Representative Nancy Pelosi (D-CA)
From: Glen Fowler, 2017-18 President, National Association of Colleges and Employers, on
behalf of the association
Date: December 1, 2017
The National Association of Colleges and Employers (NACE), a membership organization representing approximately 1,800 institutions of higher learning and 1,000 employer establishments, is concerned about a proposed change to the current tax code currently under consideration. This proposed change is the elimination of Section 117(d). This section of the code excludes tuition waivers and remissions from being considered taxable income for anyone receiving such a waiver.
We are opposed to the elimination of Section 117(d) for the following reasons:
1. The elimination of this provision would significantly increase the tax and financial burden on a portion of the population that is not in a position to absorb such a cost. The graduate students who receive these waivers do not get an actual dollar transfer as a result of the waiver. This is a paper pass through whereas the tax on the tuition waiver would be an actual monetary burden a student would likely find extremely burdensome.
2. This burden would be felt disproportionately by students from lower and middle-income families. The added cost for these individuals is likely to discourage many from pursuing an advanced degree resulting in fewer opportunities for talented individuals to improve their social and economic standing in the United States.
3. Finally, the loss of these talented individuals will be felt by a diminished capacity among American employers to pursue innovation. American employers depend on the research skills developed in the graduate programs of American universities for their own research and development efforts in maintaining global leadership role in the creation of new products, services, and methods of production. Taking away the opportunity from American students to completely develop their research skills can only diminish the long-term prospects for American industries and the American economy.
We urge the U.S. Congress to retain the provisions of Section 117(d) in its efforts to develop a modification of the current tax code.