The proposed tax cut law being debated in the U.S. Senate could cause problems for university students and large donors.

Deputy Commissioner of Higher Education Kevin McRae said the bill proposes a tax that could inhibit giving from generous alumni.

The legislation proposes a 1.4 percent excise tax on endowment earnings,” said McRae. “That means for Montanans who choose to contribute to the University of Montana foundation, the law proposes a tax on endowment earnings, which reduces the amount of money that can go to students. It would also eliminate certain types of tax credits which help qualified students pay for their education.”

One part of the bill directly affects those who depend on student loans to pay for their education.

“The plan would eliminate student loan interest deductions,” he said. “So, students who borrow money to attend school would no longer be able to deduct their student loan interest. It would also bring an end to most taxpayers on certain charitable deductions, which would have a serious impact on gifts and giving to university foundations.”

In a nutshell, McRae said the legislation would have a serious impact on the ability to afford higher education.

“We have a good working relationship with our Congressional delegation and they are aware of our concerns.”

Republican leaders believe they have the votes to push the legislation through in the Senate on Friday.

More From KMMS-KPRK 1450 AM