Proposed Tax Changes

Message to the USC Community

From: Michael W. Quick, Provost and Senior Vice President for Academic Affairs

November 22, 2017

Efforts to revise the federal tax code are rapidly moving through Congress. While these provisions remain under discussion, a number of them – if passed and enacted – would have significant negative impacts on our students and their families. We are working closely with our peers across the country to advocate on behalf of our students, parents, faculty, staff, alumni, families, and friends, and to ensure that America’s top universities continue in the most robust way possible to educate students to succeed in the 21st Century, to provide the resources necessary to allow all worthy students educational opportunity, and to continue to be the seedbed for innovation and creativity.

These are some of the potential impacts of the House and Senate bills that we are monitoring:

  • Tuition reimbursement and employer-provided education benefits. The House proposal would adversely affect approximately 1,400 USC employees who receive tuition assistance benefits. It would also impact our 3,100 Ph.D. students, whose tuition waivers or reductions could be eliminated and whose tax burdens could triple or even quadruple. In addition to the increase in taxes would be a likely increase in student debt, and, in the long run, such legislation could dissuade some of our leading innovators and creative talent from pursuing graduate careers.
  • Student loan interest deduction. In the House proposal, the elimination of the deduction for student loan interest would make it harder for middle- and lower-income students to attend USC.
  • Rules for charitable donations. In both bills, the estate tax would be phased out, and an increase in the standard deduction could eliminate major incentives for supporters of USC to donate to our university.
  • Excise tax on university endowments. Both the House and the Senate proposals would tax the payout of endowments 1.4 percent.  Should this eventually be imposed upon USC, the loss of revenue could negatively impact student scholarship funding, among other initiatives.

An article with more details on these proposals can be found here:

We are actively engaged in Washington, D.C. on behalf of our Trojan Family and the entire higher education community. We are conveying our concerns to lawmakers, and we are working with peer institutions including the Association of American Universities, the American Council on Education, and the Council for Advancement and Support of Education.

We encourage you to join with us to make your voices heard. You can do this by contacting federal legislators and monitoring the work of our partner organizations.

USC is a global leader in higher education, and we’ll continue to raise our voice on issues that affect our communities and the vital work and research that are undertaken for society at large.

Thank you for your continued support as we navigate through these uncertainties. We will keep you updated as we learn more.

Cc: C. L. Max Nikias
Academic Senate
Academic Deans
President’s Cabinet
Provost’s Cabinet