Whether you love or you hate recent changes to the tax code, you need to be aware of how it will affect students who intend to go to college. Here are a few ways that the tax overhaul may end up costing students more money in the long run.
SALT Tax Exemptions Have Been Limited
This means that the wealthiest Americans now have an incentive to try and get subsidies for public colleges reduced. State and local taxes (SALT) can still be written off as federal exemptions, but there is a new limit. That means the wealthiest taxpayers will not benefit as much from paying extra state and local taxes. By lobbying local government to reduce public college subsidies, SALT taxes may be reduced. Less funding for local colleges means that the most affordable option for poorer students may become a little less affordable.
Tuition Increases Versus Reduced Spending
Since subsidies from state and local government make up about a quarter of the funding for public colleges, that can mean significant budget cuts. Of course, the solution for the college is not to find a way to reduce costs but to raise tuition for students. As a result, the lowest income families in the US may struggle to get a college education for their children, even at a local community college.
College Aid Planning in Southern California
College Planning Source is proud to help families with college aid planning. From helping you learn how to get the most financial aid for your students to helping students prepare the best college applications, our workshops and services are just what you need to get your child into the college you want. Call us today at 858.676.0700 to learn more, or you can submit our online contact form.
