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Republican tax plan would deal financial hit to U.S. universities

From Reuters - November 2, 2017

WASHINGTON (Reuters) - The Republican tax plan unveiled on Thursday stirred anger at U.S. universities, which said its proposals to tax endowments of private institutions and repeal a deduction for student-loan interest payments would hurt institutions and students.

The bill in the Republican-led House of Representatives would increase students cost of attending college by more than $65 billion between 2018 and 2027, according to an analysis by the American Council on Education (ACE), the lead lobby group for higher education.

The plan would discourage participation in postsecondary education, make college more expensive for those who do enroll, and undermine the financial stability of public and private, two-year and four-year colleges and universities, ACE President Ted Mitchell said .

House Speaker Paul Ryan, the most powerful Republican in Congress, told a news conference the tax plan would allow the typical family of four to save around $1,182 a year, which could go toward college savings.

The plan would establish a 1.4 percent tax on the earnings of large, private-school endowments. It would also scrap a deduction for interest paid on student loans, which congressional analysts said would increase federal revenues by $47.5 billion over 10 years, if other smaller tuition-related tax breaks also end.

President Donald Trump and fellow Republicans have locked horns with colleges and universities, which they say force liberal values on students.

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