From: Rev. Philip L. Boroughs, S.J., President
To: Holy Cross Community
November 27, 2017
Dear Members of the Holy Cross Community,
I hope that you enjoyed a peaceful and relaxing Thanksgiving and that you were able to spend time with family and friends.
I write today to share with you how some of the tax reform proposals being negotiated in Congress could impact current and future college and university students, their families, and the College of the Holy Cross. As you are aware, the United States Congress is currently considering the “Tax Cuts and Jobs Act” to reform our nation’s tax code. The United States House of Representatives passed its version of the legislation two weeks ago and the Senate is expected to vote on its version this week.
While many things might change as the debate in the Senate continues, I am particularly concerned by certain provisions in the House bill that might find their way into any final legislation. These provisions include:
An annual 1.4 percent excise tax on endowment investment income: This tax would hinder our ability to invest in the future of our institution and to provide adequate financial support to students who cannot afford the full cost of a Holy Cross education. At Holy Cross, income from the endowment supports more than 15% of the College’s operations, including the financial aid budget. If this tax were to pass, it would limit the endowment's ability to support operations and to fund financial aid at its current level. This provision appears in both the Senate and House bills and thus it is highly likely to be included in any final legislation.
A repeal of the student loan interest deduction: This deduction is used by many in our community who are, or will soon be, paying off student loans. Eliminating the deduction will further burden those students who need to utilize loans to fund their educations.
An end to access to the market for tax-free bonds: Access to tax-exempt financing enables many not-for-profit institutions, including ours, to invest in infrastructure that supports the educational needs of our students. Eliminating the ability to rely on tax-exempt financing will increase the College’s cost of financing and force the College, in some cases, to defer needed infrastructure improvements.
The elimination of tax-free tuition benefits: Tuition waivers granted to graduate students are not currently considered income, but under the House legislation, these waivers would be considered income and thus taxable. For our alumni currently in graduate school programs and our current students considering graduate school, this tax burden would present a significant financial challenge.
Our nation’s college and university students, and the non-profit institutions of higher education, should not be asked to shoulder the financial cost of tax reform. Providing, obtaining, and financing a college, or graduate school, education should not become more difficult as a result of new tax legislation.
We have been in close contact with our representatives in Washington, D.C. to communicate these thoughts and concerns. We will continue not only to monitor these issues, but also to remain in touch with our representatives. As the Senate continues its debate, we encourage you to reach out to your elected officials to express your own concerns.
I thank you for your attention to these issues. Please know that we at Holy Cross are committed to providing a transformative education for our students and that we will continue to advocate for what we believe is best for them, their families and their futures.
Rev. Philip L. Boroughs, S.J.