A provision that would have protected Berea College from a tax on university endowments has been removed from the tax bill passed by Congress.
The Senate voted Tuesday evening on a bill that removed the provision, which applied to colleges that have fewer than 500 tuition-paying students.
Berea College doesn’t charge tuition and enrolls predominantly low-income students who work jobs on campus or in the community.
Berea College president Lyle Roelofs said he was disappointed in the development.
“Berea College uses its entire endowment to educate students who could not otherwise afford to attend college, serving them on a no-tuition basis,” Roelofs said in a statement.
“We agree that there need to be incentives for schools to make higher education accessible to all students, but it seems so unfortunate that the political strife over tax reform in our country will result in greater difficulty for colleges seeking to serve low-income students.”
Under the tax bill, university endowments greater than $500,000 would be subject to a 1.4 percent tax.
Berea is a private liberal arts college, has about 1,600 students and an endowment that's more than $1 billion.
On Tuesday evening, a Senate parliamentarian ruled that the provision shielding Berea’s endowment from the tax violated the chamber’s rules.
Senate Majority Leader Mitch McConnell blamed the removal on Democrats, who originally challenged the provision.
“I’m frankly mystified that the Democrats stripped this provision from the bill," McConnell said in a statement. "They didn’t have to, but they did. Democrats’ fanatical opposition to the tax bill reached such hysterical heights that Bernie Sanders proudly led the charge to deliberately harm Berea College, which offers free tuition to less fortunate families."
The sweeping tax bill is nearing final passage from the Republican-led Congress. Republican leaders hope to pass the legislation Wednesday and send it to President Trump to sign it into law.
Josh Miller-Lewis, a spokesman for Vermont Sen. Bernie Sanders, blamed the removal of the exemption on the hurried pace of the bill's passage.
"Following the parliamentarian’s decision, Republicans could have rewritten the provision but instead they chose to continue their mad dash to provide tax breaks to billionaires and profitable corporations," Miller-Lewis said in an email. "Every Democrat and Independent voted against this bill. Republicans wrote it and voted for it."
Rep. Andy Barr, a Republican representing the 6th Congressional district, said he hoped to exempt Berea and other small work-study colleges in future legislation.
“It’s unfortunate that they put partisan politics ahead of ensuring that students — many of whom are low-income and first-generation college students and work study colleges — would continue to receive tuition-free education,” Barr said in a speech on the House floor.
House Budget Chairman Kevin Brady, a Republican from Texas, said he would work with Barr “to finding a permanent solution to this problem as soon as possible.”
