University presidents are often asked: “What keeps you up at night?”
Among the various issues that I worry about, the most frequent relate to the well-being of our students and our employees. These are the people who have put their trust in our university as the imperfect but nevertheless just and idealistic institution that I signed on to lead.
The current tax proposals, therefore, rank among the worrisome issues right now. This isn’t because of how these proposals would impact our university budget or endowment. It is because of how they would impact our least financially privileged employees.
The U.S. House of Representatives’ proposal to tax tuition waivers provided as an employee benefit disadvantages those who are already the least advantaged members of the academic community and who are striving to ensure access to better opportunities for their children. (The U.S. Senate tax plan does not contain the proposal. The House and Senate are working on a final bill.)
Historically, education has been and remains the key to a brighter future for first-generation college students. It is, equally, the key to a brighter future for our country.
The personal and societal economic impact of a bachelor’s degree is well-documented. And let’s not overlook that an educated workforce will be required for the corporate expansion and economic growth that the current Senate and House tax proposals promise.
Our nation’s colleges and universities are able to provide a unique access point to higher education for young people who might not otherwise have that opportunity through the employee benefit of tuition waivers for their parents. For higher education’s least well-paid employees, this benefit is a game changer.
There has been no lack of commentary on the impact of the tax proposals under consideration by the House and the Senate. The voices of higher-education leaders, lobbyists and graduate students have been repeatedly highlighted in news outlets.
Voices that are largely missing are those of the college and university employees who gain the most from the provision that allows their dependents to receive tax-free tuition remission. These are the people without whom our campuses could not operate. They are the campus safety officers, maintenance staff, housekeepers, food service workers and administrative assistants who would otherwise be unable to afford access to an education of the quality that is available to them through their workplaces.
Taxing this tuition remission would raise taxable income so significantly that it would shut down access to countless young people who may lack wealth but who have no shortage of ambition or drive to succeed.
Currently, at Widener University, where I serve as president, most members of our maintenance staff — from painters to electricians to HVAC technicians — have children who are enrolled or have earned bachelor’s degrees on our campus and have gone on to become well-employed, tax-paying citizens who contribute to their communities.
The same is true of our administrative assistants, one of whom shared this story:
“My family did not have enough earning potential to have a college fund for two children. The company I was working for previously offered me a $10,000 raise to stay. No way could that touch what I’d save in tuition payments.
“My son graduated from Widener and is currently in his final year of medical school. Without the opportunity of a private university education, it’s unlikely that a professor would have gotten to know him well enough to encourage and mentor him to consider medical school. Greg started medical school with no student debt and is deeply grateful.”
If the government wants to increase tax revenues, a sure way to achieve that goal is to increase the number of college graduates who go on to careers such as physicians or, like another administrative assistant’s two children, move into management careers after college.
Our higher-education institutions are essential to the future thriving of our country. They are the greatest routes to social mobility. As one employee said: “A college degree is the best start for their future and with tuition remission they have no student loan debt.” There is ample research showing that college graduates earn more and, therefore, pay more in taxes and don’t rely on government assistance. In 2017, jobs that don’t require a college credential but pay as well as those requiring bachelor’s degrees are shrinking.
With tax-free tuition waivers as a benefit for hardworking, lower-income employees, universities are meeting the goals of our country to reduce student loan debt, grow the economy and create a ready workforce of well-educated graduates eager to give back to a society that allowed them an education they otherwise would have had to forego.
While the voices of college and university staff members have hardly been heard in the tax proposal debate, these employees have a lot to say about the fact that if their children’s tuition waivers had been taxed, a valuable bachelor’s degree might have been off the table for their families. And if that were the case, we would have fewer successful professionals contributing to a vibrant economy today.
Julie E. Wollman is the president of Widener University.