Unintended Consequences of GOP Tax Law

Inside Higher Ed: A provision in the Republican tax law passed in 2017 could actually mean a hike in the tax bill for many low-income families with a student receiving scholarships for college, a top higher ed group warned lawmakers this month.

Scholarships or grants for nontuition expenses like room and board have traditionally been subject to the same marginal tax rate paid by parents. So low-income students could expect to pay low taxes. But the Tax Cuts and Jobs Act applies the same high marginal tax rates for those scholarships as it does for trusts and estates.

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