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Exclusive: A group of House Republicans is introducing a bill to increase taxes on college endowments so that taxpayers don’t have to pay President Biden’s $500 billion-plus student loan forgiveness bill.
Rep. Dave Joyce, chairman of the moderate 44-member Republican Governance Group, told Fox News Digital that the law would hold higher education institutions accountable for the rising cost of a college degree. said he intended to
“America’s elite universities are silent beneficiaries of President Biden’s misguided student debt relief,” said Ohio Republican Joyce. “These institutions need to be held accountable for their role in our country’s ballooning student debt.
Joyce, along with two Republicans in Congress, Rep. Byron Donald of Florida and Rep. Mayra Flores of Texas, supports the bill. The trio argue that it is unfair for taxpayers to pay for Biden’s programs, and little has been done to force American universities to lower student costs.
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“Transferring $600 billion in student loans from one group of Americans to another will not make education more affordable.” encourages them to continue pushing up tuition fees.”
The bill would increase the tax that universities must pay annually on profits from investments or interest derived from donations from 1.4% to 10%. This tax was created as part of his 2017 tax bill signed by former President Donald Trump.
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Joyce’s bill would expand the number of universities covered by the tax. Currently, only higher education institutions with donations equivalent to $500,000 per student are subject to the tax. The law reduces that threshold to $250,000 per student, which Johns Hopkins University, Carnegie Mellon University, Boston College, and other schools will be forced to pay.
The bill also raises the annual tax on donations to 20%, penalizing colleges and universities that raise net attendance prices above the rate of inflation in the past three years.
Proponents of the bill say a recent study by the National Bureau of Economic Research shows that increased college endowments won’t significantly reduce student tuition and housing list prices.
President Biden announced plans to forgive last month $10,000 student loan For borrowers with an annual income of less than $125,000. Pell Grant recipients can receive $20,000 in debt forgiveness if their income is below the same threshold.
Responsible Budget Committee pay for the program Between $440 billion and $600 billion. white house official But it argues that the proposal has been paid in full, as the annual budget deficit is shrinking thanks to lower spending in other areas.
Bharat Ramamurti, Deputy Director General of the National Economic Council, said, “This year’s deficit reduction is already on track and well above that.” “We are making good progress $1.7 trillion deficit reduction this year. “
Economists say the White House’s comments and unwillingness to outline offsetting student loan subsidies such as tax increases and budget cuts mean the program’s costs will add to the annual budget deficit. They also say that just because spending is falling in one area doesn’t mean new spending is free.
“For example, if you have a family that owes $100,000 for emergency medical care, and the next year you buy a $50,000 sports car and don’t have to spend $100,000 a year on emergency medical care, it’s They claim it’s ‘free,'” says Brian Riedl. A senior economics fellow at the center-right Manhattan Institute.
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Experts argue that more debt will force future taxpayers to pick up a benefit tab.
“If this is added to the national debt, it will only drive up the interest costs necessary to avoid defaulting,” Riedl said. “All of that will ultimately drive up taxes because, at some point, we have to find a way to pay that debt.”