LSU President F. King Alexander said donations to the University could be “substantially curtailed if current tax reform efforts go unchanged” in an article for Greater Baton Rouge Business Report on Tuesday. 
Alexander said the current tax reform bill, which passed in the House on Nov. 16, will “eradicate” the tax deductions used by alumni and friends of the University to make large financial donations. He said the donations are key to supporting University students. 
“If passed without important modifications, our public universities will be faced with even bigger challenges at a time of increasing state funding instability,” Alexander said. “The timing couldn’t be worse for LSU and other public universities.” 
Under section 26 of the Internal Revenue Code, charitable donations, contributions and gifts to public universities can be tax deductible. The House GOP tax reform bill, H.R. 1 Tax Cuts and Jobs Act would eliminate such tax deductions. 
Alexander said the House bill will affect student loan repayment, as interest on these loans will no longer be tax deductible. 
“Imagine if, upon graduating and starting your dream job at a beginner’s salary, you find out that your student loan repayment just got more expensive,” Alexander said. “Eliminating the interest deductibility of these loans would inevitably lead to more student loan defaults while also extending the duration of a graduate’s repayment period.” 
Alexander said the House tax bill will affect graduate students harder than undergraduates. The House bill makes tuition wavers fully taxable, which will cause graduate students to see a 50 percent increase in their taxable income, Alexander said. 
Alexander said both the House and Senate versions of the tax bill will have “unintended consequences” on athletics at the University. 
“Right now, LSU is one of the only universities in the SEC with a self-sustaining athletics program,” Alexander said. “LSU Athletics has fueled its own success and even contributes back to the university’s academic operational budget annually.” 
Alexander said the elimination of tax deductions on gifts to the University could result in higher costs for tickets to athletic events, scholarship reductions and decreased affordability for students. 
“Here in Louisiana, where we already lag at 49th in the nation in terms of college degree attainment, the residual effects of these impacts could linger for generations,” Alexander said. “I am…raising serious concerns about offsetting these tax deductions on the backs of the next generation of students and our public colleges and universities charged with educating them.”