“Surprising Shift for Senate Tax Panel”
Inside Higher Education reports:
A Finance Committee spokeswoman confirmed late Thursday that in one of their last acts while their party still controls Congress, the panel’s Republican leaders would hold a hearing “that looks generally at whether tax breaks for tuition and universities’ efforts to help low- and middle-income families are helping in an era of ever-increasing tuition.”
That statement was generally consistent, though somewhat vaguer, than what one Washington higher education official was told the subject of the hearing would be: “a look at the relationship between federal tax provisions and tuition increases.” In other words, do federal policies that give taxpayers a deduction or credit for money they spend on college tuition — like, for instance, a proposal by the new Democratic majority in Congress to “make college tuition deductible from taxes, permanently” — lead colleges in turn to raise their tuition?
College officials seem genuinely perplexed by the committee’s plan.
A number of economists, among them Richard Vedder of Ohio State and Bridget Long of Harvard University have argued that tax credits may play some role in tuition increases. I don’t know the case myself, but it seems worth hearing. College administrators are of course perplexed. Colleges would seize on any opportunity to increase tuition? Why, never! Banish the thought.