This is the Cato Daily Podcast for Tuesday, November 14th, 2017. I'm Caleb Brown. What impact will tax reform have on higher education?

A variety of ideas are being thrown out.

Some of them may make it into the final tax reform proposal.

Neil McCluskey, director of Cato's Center for Educational Freedom, offers his thoughts on the likely impacts.

Walk us through some of the reforms that are built into this tax reform that are of interest to higher education.

Right, the higher education community such as it is, it's very much alarmed about the House Tax Reform proposals because there's a lot of things in there

that could in one way or another either affect the schools or affect the

effect both. The provision that got a lot of attention right off the bat

was the proposal that the interest payments that people make on federal student loans are currently

tax deductible and they would cease to be tax deductible.

And the concern of course is that this ultimately makes college more expensive

because you are no longer getting that tax deduction. Of course there's no inherent reason that your interest rates on federal

student loans should be tax deductible and any time the government puts its thumb on the scale to say pay more

for college because we'll make the pain for you less is a bad thing because ultimately it just encourages schools to raise their

prices but that's what people were most angry about and of course it doesn't do a

whole lot for affordability since you don't start to make those payments until after you're in college.

What has sort of surpassed that as far as I can tell among the people in or at least the various groups in higher education is that

graduate students, especially if you get into PhD programs.

They tend to get stipends, so they get paid.

But an even bigger benefit to them is tuition discounting, which is essentially all that means is you don't pay tuition. The

school says come be a student and we're not going to charge you what it says the

sticker price is for this program.

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