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My Turn: A one-two punch to the gut for the middle class



For the Monitor
Thursday, November 30, 2017

For nearly 20 years, I have worked as a financial aid professional, helping students and families at my own university and across the state as a volunteer better understand the financial aid process.

While nearly all of them would agree that there is a need for comprehensive tax reform in the United States, an approach that negatively impacts middle-class families is not the reform they’re looking for.

The current Republican House tax plan eliminates the student loan interest deduction, which means that America’s middle-class families will be paying taxes on student loan interest that they borrowed to attend college. This in and of itself will make college more expensive for middle-class families across the country.

While the plan claims to be centered on job creation that is essential to the economic future of our country, it would actually do quite the opposite. The jobs that will be created in the years ahead will require a highly skilled, qualified workforce to fill them. A vast majority of those jobs will need college graduates. Where will they come from?

Economic and tax policies that make the dream of a college education more expensive for the middle class – and more difficult for those seeking to join the middle class – is not an investment in America’s students and families.

Add to this that the higher education plan put forward by the White House eliminates the federal student loan subsidy on which so many middle-class families depend. This means that the benefit that middle-class student count on right now – having a portion of the interest on their federal student loans subsidized – will end. It also means that those same middle-class students will now be responsible for 100 percent of the interest payments while they’re in college, and when they graduate they will now pay taxes on the interest they’re paying back.

This is a one-two punch in the gut for middle-class Americans.

Under the White House plan, they lose the interest rate subsidy on their loans and under the GOP House tax plan, they can no longer deduct the interest when they file their taxes. The White House higher-education budget also targets the federal Work Study program. This is a program that many working-class and middle-class students rely on so that they can work and go to school. It shelters the compensation that they earn working through the program from impacting their next year’s financial-aid eligibility. Students stand to lose financial aid eligibility as a result of this.

Under the Republican House tax proposal, doctoral students who are pursuing research in critical areas ranging from science to education stand to be taxed on tuition waivers that they receive. How can our country adopt tax policy that taxes educational benefits for people who are searching for cures for cancer or methods for teaching children with autism and yet reduce corporate taxes and all but eliminate taxes on inherited wealth?

What is the message we’re sending to middle-class students pursuing advanced degrees?

Let us not forget those students who come from families of high need – students who desperately want to join the middle class and know that a college education is the route to get them there. The White House higher education budget cuts federal Pell Grant programming, ends the federal Perkins Loan program, eliminates the FSEOG program – all actions that will slam the doors of college access to the neediest of students all but shut.

A middle class that is paying more for college and the neediest student population unable to attend, thus shrinking the middle class and expanding the gap between the haves and the have-nots is certainly one result and one that we cannot afford to accept. Indeed, these cuts pose a negative impact not only on college students and their families but on all of us who benefit from having accomplished, educated and well-trained professionals in our daily lives.

Now is the time for all of us who care to reach out to our elected representatives to urge them to gather insight and much-needed perspective on college affordability and on the benefits of helping those who want to work and learn and succeed to make a better life.

New Hampshire’s future and our nation’s future depend on bipartisan tax reform that grows the middle class, not on a plan that effectively shrinks it.

(Kenneth Ferreira is the associate vice president for student financial services at Franklin Pierce University and president-elect of the New Hampshire Association of Student Financial Aid Administrators.)