This piece was originally published at The Chicago Tribune.
Senate and House Republican leaders have agreed to abandon many of the controversial proposals that higher education leaders and students had rallied to thwart, according to congressional aides. Under the agreement, tuition waivers received by graduate students remain tax-free, students can still deduct loan interest payments and bonds that colleges use for construction stay interest-free.
Details of the final legislation are still forthcoming, but aides with knowledge of the negotiations who were not authorized to speak publicly say lawmakers have responded to the outcry from students.
Thousands of graduate students have staged walkouts in protest over the GOPtax plan, while eight students were arrested last week for demonstrating outside the Capitol Hill office of House Speaker Paul Ryan, R-Wis. Many said their taxes would soar if a House Republican proposal to treat their tuition benefits as income made it into the final version of the legislation. Universities waive tuition for graduate students willing to work as teaching and research assistants, and those waivers are exempt from taxation.
In the wake of the graduate protests, a group of 31 House Republicans, led by Rep. Pete Sessions, R-Texas, sent a letter asking party leaders to strip out the tuition waiver provision. They wrote that the “repeal of the income exclusion for graduate students would subject thousands of graduate students to a major tax increase at a time in their lives when they lack the ability to pay.”
Graduate students, alongside other people with education debt, were also up in arms over a proposal to eliminate the student loan interest deduction. The deduction lets people repaying student loans reduce their tax burden by as much as $2,500. Because borrowers can claim the deduction even if they choose not to itemize, the tax benefit is available to anyone paying interest on education debt. The higher the interest payments, the greater the deduction, which is why the benefit is especially valuable to people with large loan amounts, such as graduate students…