GOP reps target skyrocketing tuition with tax hike on university endowments
Reps. David Joyce and Nicole Malliotakis said they hope the bill will help to curb rapid tuition growth.
Rep. David Joyce (R-OH) recently introduced a bill that would increase tax rates on private universities’ endowments from 1.4 to 10 percent in an effort to cut rising tuition costs.
Joyce said during an interview with Fox News that he suspects many universities have raised tuition rates in response to expanded federal student loan guarantees, which may make high tuition more palatable to prospective college students.
“I think the universities have benefited the most from our student loan program, and they’ve raised tuition at a multiple that exceeds inflation in many cases. And so they had the most to gain for it,” Joyce said. “I think you’ve got to get universities to have more skin in the game.”
Rep. Nicole Malliotakis (R-NY), the bill’s co-sponsor alongside Joyce, expressed hope that the bill will limit future tuition hikes, alleging that universities are partly to blame for recent increases in student loan debt.
“Our legislation will finally hold universities accountable for their role in fueling the student debt crisis and encourage them to limit rapid tuition increases,” she said.
Rep. Malliotakis has recently sponsored several bills aimed at giving students access to private sector solutions to student debt. On July 25, she and Rep. Scott Peters introduced the Employer Participation in Repayment Act in the House, a bill which would enable employers to contribute more than $5,000 each year to their employees’ outstanding debt tax-free.
“Over the past 20 years, the cost to attend college has risen 45 percent, forcing students to choose between pursuing higher education and taking on tens of thousands of dollars in burdensome student loan debt,” Malliotakis said.
“This tax incentive will continue to strengthen our workforce, increase our nation’s competitiveness, and provide much-needed economic relief to millions of Americans who are struggling to make ends meet during this time of record-high inflation.”
[RELATED: Kamala Harris wants to make college ‘tuition-free once and for all’]
Joyce and Malliotakis’ bill comes in the wake of numerous debt forgiveness programs created by the Biden-Harris administration. In July, the administration rolled out a 1.2 billion-dollar debt forgiveness plan for thousands of federal government employees, consistent with Biden’s goal to “provide relief to as many borrowers as possible across the country.”
“The additional Americans approved for PSLF today are hardworking public servants who will finally receive the financial breathing room they were promised,” said Secretary of Education Miguel Cardona. “This is relief that will bring real change in their lives and marks another win for this administration’s relentless and unapologetic work to fix a broken student loan system.”
Campus Reform has reached out to the Department of Education and the American Federation of Teachers for comment. This story will be updated accordingly.