SENATE BILL: Independent Educational Institution Relief Act (Redraft Passed)

[Southern Senator North Carolina Yankee]

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Sponsor: shua

[Southern Senator North Carolina Yankee]

The sponsor has 24 hours to begin advocating for this.

[President Tyrion]

For the record, this is what we would be repealing in full:

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And shua's text leaves the 3rd clause intact.

[🐒Gods of Prosperity🔱🐲💸]

There is no reason that institutions of learning should be taxed out of existence, or students priced out of attending, just because they either do not qualify for federal loans or are against receiving tax dollars on principle. This is an overreach of government authority and ought to be corrected.

[Fmr. Pres. Duke]

I am going to assume that most schools have 5% or greater of its students receiving loans. I doubt any school pays that tax. In the event some did, why would we apply it to all universities? State supported ones are already using taxpayer dollars. It makes no sense to levy a 50% tax on their revenue.

All in all, the wording either needs to be cleaned up (exempt public, tax payer funded universities) or we need to just do away with it because no one pays it anyway.

[tmthforu94]

Support in the current language, though I would be interested in doing something else with the bill. Right now it essentially wipes away a tax that provides no revenue.

[Fmr. Pres. Duke]

http://nces.ed.gov/fastfacts/display.asp?id=31

Yeah, no school pays that tax. Look at how many students receive aid of some sort. No college exists where <5% of its students are receiving aid.

[🐒Gods of Prosperity🔱🐲💸]

Yes, some colleges are paying this tax.  Federal aid is not available for students attending institutions run by for-profit companies.  Also there are some colleges such as Hillsdale that have a philosophical objection to accepting federal aid.  So I imagine there is some revenue from this tax, but not enough to justify this policy.

[Fmr. Pres. Duke]

Yes, some colleges are paying this tax.  Federal aid is not available for students attending institutions run by for-profit companies.  Also there are some colleges such as Hillsdale that have a philosophical objection to accepting federal aid.  So I imagine there is some revenue from this tax, but not enough to justify this policy.

Oh god, I do hate for-profit schools though, especially ones run by consortiums that are essentially degree mills and students graduating from these schools have no job prospects and come out with loads of debt. There is a company that runs Charlotte Law School and they are backed by a hedge fund. They charge $40k a year and their students literally have no jobs when they come out.

[🐒Gods of Prosperity🔱🐲💸]

Yes, some colleges are paying this tax.  Federal aid is not available for students attending institutions run by for-profit companies.  Also there are some colleges such as Hillsdale that have a philosophical objection to accepting federal aid.  So I imagine there is some revenue from this tax, but not enough to justify this policy.

Oh god, I do hate for-profit schools though, especially ones run by consortiums that are essentially degree mills and students graduating from these schools have no job prospects and come out with loads of debt. There is a company that runs Charlotte Law School and they are backed by a hedge fund. They charge $40k a year and their students literally have no jobs when they come out.

Yeah, so I'm fine that we don't fund loans to those institutions, but we shouldn't then turn around and punish them for not having loans we don't offer them and make students lose even more money.

[Fmr. Pres. Duke]

Yes, some colleges are paying this tax.  Federal aid is not available for students attending institutions run by for-profit companies.  Also there are some colleges such as Hillsdale that have a philosophical objection to accepting federal aid.  So I imagine there is some revenue from this tax, but not enough to justify this policy.

Oh god, I do hate for-profit schools though, especially ones run by consortiums that are essentially degree mills and students graduating from these schools have no job prospects and come out with loads of debt. There is a company that runs Charlotte Law School and they are backed by a hedge fund. They charge $40k a year and their students literally have no jobs when they come out.

Yeah, so I'm fine that we don't fund loans to those institutions, but we shouldn't then turn around and punish them for not having loans we don't offer them and make students lose even more money.

Typically, the consortium is the one that funds the loans. I am not sure not taxing them will cause them to lower their tuition, since they already charge the going rate of other private schools.

That said, I wouldn't be opposed to dropping the tax if the Senate votes to do so, especially if it is hurting students more so than the company vis a vis interest rates, but taxing the for-profit bastards isn't something I mind either. I think their product is a farce and they prey on people who don't know any better.

[Goldwater]

I support this.

[TNF]

I oppose any and all efforts to end the tax on for-profit universities, which was adopted, if I do recall correctly, as an alternative to total abolition of those institutions, something that I'd be squarely in favor of. shua's support for giving tax relief to predatory institutions which go after the young and working class is disgusting, and I ask the Senate not to indulge him on this seemingly harmless bill.

Offering an amendment:

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[🐒Gods of Prosperity🔱🐲💸]

Hostile, of course.

That is an extremely blunt and counterproductive way of going about protecting students.

[TNF]

Hostile, of course.

That is an extremely blunt and counterproductive way of going about protecting students.

I don't necessarily disagree if you mean we should just ban for-private universities.

[Fmr. Pres. Duke]

I know this may not be popular for me to say, but the more I think about it, the more keeping this tax intact makes sense. I have a strong disdain for for-profit educational groups. They prey on kids without many future prospects, and kids that are scared. They tell them unrealistic things to get them in, charge them a hefty tuition and send them on their way no better than they were before.

If this tax is hurting the student, I would be willing to consider repealing the tax. Typically though, the loans funded by these private groups are on par with the public loans. If I'm wrong, please correct me. I'm all for helping the student, but if this will only help the folks making money off these poor kids, I'm for keeping it.

I hope my view at least makes sense to some people. I don't want to appear like I am a friend to the for-profit educational consortiums, because I'm not.

[🐒Gods of Prosperity🔱🐲💸]

I know this may not be popular for me to say, but the more I think about it, the more keeping this tax intact makes sense. I have a strong disdain for for-profit educational groups. They prey on kids without many future prospects, and kids that are scared. They tell them unrealistic things to get them in, charge them a hefty tuition and send them on their way no better than they were before.

If this tax is hurting the student, I would be willing to consider repealing the tax. Typically though, the loans funded by these private groups are on par with the public loans. If I'm wrong, please correct me. I'm all for helping the student, but if this will only help the folks making money off these poor kids, I'm for keeping it.

I hope my view at least makes sense to some people. I don't want to appear like I am a friend to the for-profit educational consortiums, because I'm not.

I don't understand. Are you saying that it doesn't matter how the tax increases the tuition cost for the student because there are private loans to cover it?

Let's also remember if there is a corporation making money off of a college then they are already paying the corporate income tax. 

[Fmr. Pres. Duke]

I know this may not be popular for me to say, but the more I think about it, the more keeping this tax intact makes sense. I have a strong disdain for for-profit educational groups. They prey on kids without many future prospects, and kids that are scared. They tell them unrealistic things to get them in, charge them a hefty tuition and send them on their way no better than they were before.

If this tax is hurting the student, I would be willing to consider repealing the tax. Typically though, the loans funded by these private groups are on par with the public loans. If I'm wrong, please correct me. I'm all for helping the student, but if this will only help the folks making money off these poor kids, I'm for keeping it.

I hope my view at least makes sense to some people. I don't want to appear like I am a friend to the for-profit educational consortiums, because I'm not.

I don't understand. Are you saying that it doesn't matter how the tax increases the tuition cost for the student because there are private loans to cover it?

What I am saying is, I would be more likely to support it if we knew the tax directly caused the tuition to be as high as it is in these for-profit institutions. If it does not effect the student, we should keep it. I only have knowledge about legal education. There, the loan rates for these for-profit schools are just as competitive with the federal loan system and their tuition tends to be on par with other private schools.

My beef with these for-profit conglomerates is they prey on uninformed students and tell them lies to get them in the door, they give them a giant loan, and they send them on their way. I am generally lenient on taxes because many of them are inefficient, but in this case, I don't think we want to encourage for-profit education anymore than we do. It literally helps no one except those who are making a profit and puts thousands of students in debt each year.

[🐒Gods of Prosperity🔱🐲💸]

You seem to be comparing tuition cost at other private universities with tuition cost at for-profit universities before the tuition tax, so I don't think that tells us how the tuition tax is affecting cost.   I'd say let's just go with the common sense observation of what we see with almost all taxes, particularly sales or excise taxes, which is that they get passed on to the person buying the product.

It would be good to find a way we can help students from being burdened by loans they won't be able to pay back, but the current tax doesn't help with that at all.

[Fmr. Pres. Duke]

We can certainly give it a shot, but my understanding is, this tax exists to discourage for-profit education in general, which is something I am very supportive of. I will wait and see if anyone else chimes in on this before I come to a final decision, but ultimately I will do what is best for the student.

I would just hate for us to repeal this tax only to see for-profit educational centers become even more numerous.

[President Tyrion]

You seem to be comparing tuition cost at other private universities with tuition cost at for-profit universities before the tuition tax, so I don't think that tells us how the tuition tax is affecting cost.   I'd say let's just go with the common sense observation of what we see with almost all taxes, particularly sales or excise taxes, which is that they get passed on to the person buying the product.

It would be good to find a way we can help students from being burdened by loans they won't be able to pay back, but the current tax doesn't help with that at all.

The university market is not perfectly competitive nor remotely homogenous, so the assumption that the cost to bear on such a tax falls squarely on the consumer is not necessarily validated by macroeconomic theory. It could be true, but it's not fair to assume it.

[Fmr. Pres. Duke]

You seem to be comparing tuition cost at other private universities with tuition cost at for-profit universities before the tuition tax, so I don't think that tells us how the tuition tax is affecting cost.   I'd say let's just go with the common sense observation of what we see with almost all taxes, particularly sales or excise taxes, which is that they get passed on to the person buying the product.

It would be good to find a way we can help students from being burdened by loans they won't be able to pay back, but the current tax doesn't help with that at all.

The university market is not perfectly competitive nor remotely homogenous, so the assumption that the cost to bear on such a tax falls squarely on the consumer is not necessarily validated by macroeconomic theory. It could be true, but it's not fair to assume it.

Right, the university system tends to act more like an oligopoly. When tuition is hiked at one school, the others tend to follow suit (like when Boston U hit 60k a year, other school soon followed), but in the end, the prices tend to congregate around a median.

Because these for-profits are charging the same rates as other non-profit private universities which do not pay the tax, I think we can assume the tax is not effecting the students too badly, at least not any worse than attending the school in the first place is effecting them.

It would be a stretch to assume that repealing the tax would lead to a drop in tuition at all. More likely, we will see these conglomerates reap larger net profits after taxes.

Of course, I could be wrong. I may be letting my personal feelings toward this type of "education" get in the way and cloud my judgment.

[🐒Gods of Prosperity🔱🐲💸]

Because these for-profits are charging the same rates as other non-profit private universities which do not pay the tax, I think we can assume the tax is not effecting the students too badly, at least not any worse than attending the school in the first place is effecting them.

again, I do not know where you could be getting tuition rate information for colleges that pay a 50% tax on tuition, since since a scenario does not exist IRL.
I don't assume that a 50% tax translates into a 50% tuition increase.  I do think it is reasonable to assume that it most likely means some substantial increase. 

[TNF]

Because these for-profits are charging the same rates as other non-profit private universities which do not pay the tax, I think we can assume the tax is not effecting the students too badly, at least not any worse than attending the school in the first place is effecting them.

again, I do not know where you could be getting tuition rate information for colleges that pay a 50% tax on tuition, since since a scenario does not exist IRL.
I don't assume that a 50% tax translates into a 50% tuition increase.  I do think it is reasonable to assume that it most likely means some substantial increase. 

Which is just going to mean fewer people go to the for-profit colleges in favor of non-predatory community colleges and public universities. I fail to see the problem here.

[Fmr. Pres. Duke]

Because these for-profits are charging the same rates as other non-profit private universities which do not pay the tax, I think we can assume the tax is not effecting the students too badly, at least not any worse than attending the school in the first place is effecting them.

again, I do not know where you could be getting tuition rate information for colleges that pay a 50% tax on tuition, since since a scenario does not exist IRL.
I don't assume that a 50% tax translates into a 50% tuition increase.  I do think it is reasonable to assume that it most likely means some substantial increase.  

Oh, I see what you're saying. I guess the only way we figure it out is for the GM to make up some numbers for us.

But like I explained above, I doubt it will be a substantial difference, tax or no tax, because most educational institutions follow suit in price setting. It would be my hope that the tax is simply discouraging more for-profits from hitting the market, but we are all theory crafting here.