I know the GOP feels like they need a political win here. But there may be some very unfortunate unintended consequences of the tax reform measure.
The much-talked about GOP tax reform could cripple the innovative Cristo Rey education model which has helped thousands of low-income students obtain high school degrees and go on to college.
According to The Washington Examiner, the House bill includes the cutting of a portion of the tax code that allows for “educational assistance programs” such as the Cristo Rey model.
The Cristo Rey Network of college preparatory academies operate in 21 states and the District of Columbia using what’s called a “Corporate Work Study Program” where students work one day a week at an entry-level professional job and earn a portion of the cost of education.
The student’s earnings are not currently taxed but that would change under the House bill, according to Elizabeth Goettl, CEO of the Cristo Rey Network.
There are currently over 11,000 students enrolled in the network, and over 13,000 graduates in the overall history of the program.
Cristo Rey is aggressively reaching out to Republican members of the House Financial Services Committee, and is also trying to enlist lobbying support from Education Secretary Betsy DeVos, and former Florida Gov. Jeb Bush, who has been a supporter of the network’s goals.
Goettl said, “For some of our schools, the economic impact would be sufficient that they wouldn’t be able to continue to operate. It’s just too much of a shoestring operation.”
This is something that should be looked at.