The tax reform bill in Congress right now that has been voted on by the House is going to kick college bound student in the ass and significantly raise the cost of education at a time when it is already too damn high.
According to the Congressional report from the Joint Committee on Taxation, the proposed “tax cut” bill will actually increase the costs of education to students and families more than $71 billion over the next decade.
The primary drivers of this increased cost is the drastic changes to tax credits, deductions, and exclusions. Let’s not forget the House wants to eliminate the ability for student loan debtors to be able to deduct the cost of student loan interest payments.
On top of this the current administration is also making it tougher for defrauded students to have their federal student loans forgiven and they also want to eliminate the Public Service Loan Forgiveness program that helps people working in public benefit jobs. And oops, I almost forgot about the elimination of the deduction teachers utilize when they purchase school supplies out of their own pocket.
According to the Washington Post, when it comes to the elimination of just the student loan interest deduction the hit will impact people hard no matter what their political affiliation is.
“Getting rid of the deduction would cost borrowers more than $21 billion in the next 1o years. More than 12 million people took advantage of the deduction in 2015, according to the Internal Revenue Service. That’s about 3 in 10 of the 44 million Americans with student loans.”
I don’t profess to have the magic answer here but at a time when the world is becoming smaller and more competitive and education is the fuel that will drive productivity and ingenuity why are we making it more expensive to go to college and leave consumers straddled with massive debt they can’t afford?
Let’s not forget about the extended impact of this student debt and increased costs individuals will bear cascading decades into the future and robbing people of their ability to properly save for retirement. When it comes to unmanageable federal student loan debt the number of Social Security recipients is increasing who are having their limited benefits garnished because of student loan debt will continue to rise.
I’m confident there is not a damn thing I can say to day to enforce any sense of alarm into the average person. But this slow moving train wreck is headed to a time when more older American’s with no retirement savings will have their Social Security benefits garnished for generational student loan debt and that mess is going to land on all of us unless we are prepared to warehouse the elderly or stack them by the curb like cord wood.