According to RoadToCollege.com’s recent article, the recent tax bills passed in the House and Senate still need to be finalized before a bill can be signed into law, but they introduce many changes that affect college education funding, such as, income tax education deductions, endowment funds, and state budgets that support higher education.
For parents, the standard tax deduction allowed on tax filings will be nearly double starting in 2019. But income tax deductions allowed for state and local property taxes will now be capped at $10,000, so higher education advocates are concerned this could cause less taxes that are used to support public universities and community colleges.
Colleges will probably offer less financial aid to students after the tax bill is passed, as all colleges are predicted to be negatively impacted by the new bill:
– Small private colleges that do not receive state appropriations, and rely on giving for financial aid awards, are expected to lose charitable donations.
– Large colleges who receive endowments worth more than $500,000 per student, such as Ivy League schools like Harvard, will be impacted by the new tax bill with a 1.4% tax imposed on private college endowments.
– All colleges may have reduced support for their sports programs when the rule providing a charitable deduction on taxes for 80% of the amount paid to purchase athletic event tickets is eliminated.
Keep following our blog to learn more as this topic progresses. with any questions and attend one of our free seminars for more college planning tips.