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  • Washington Highlights

    State of the Union Introduces Student Aid Tax Reforms, Precision Medicine Initiative

    Matthew Shick, Sr. Director, Gov't Relations & Regulatory Affairs
    Tannaz Rasouli, Sr. Director, Public Policy & Strategic Outreach

    President Obama Jan. 20 delivered his sixth State of the Union Address before Congress, highlighting efforts to combat Ebola, student aid tax reform, and a new precision medicine initiative.

    Thanking “our scientists, our doctors, our nurses, [and] our health care workers” for “rolling back Ebola -- saving countless lives and stopping the spread of disease,” President Obama stated, “I could not be prouder of them, and I thank this Congress for your bipartisan support of their efforts.” He noted “the job is not yet done, and the world needs to use this lesson to build a more effective global effort to prevent the spread of future pandemics, invest in smart development, and eradicate extreme poverty.”

    Several times the president alluded to tax reform to help families afford college. In a fact sheet released Jan. 17, the president proposes to “consolidate six overlapping education provisions into just two, while improving the American Opportunity Tax Credit [AOTC] to provide more students up to $2,500 each year over five years as they work toward a college degree.”

    The proposal describes eliminating the Hope Credit, Lifetime Learning Credit, and tuition and fees deduction to bolster the new AOTC. Of note to medical students, graduate and professionals are eligible for the Lifetime Learning Credit, whereas the AOTC is limited to the first 4 years of higher education.

    Additionally, the president proposes to “eliminate the tax on student loan debt forgiveness under Pay-As-You-Earn (PAYE) and other income-based repayment plans.” Currently, these plans offer forgiveness of remaining federal student loan debt after 20 to 25 years of repayment ($48,000 in some cases), which would be accompanied by a large tax bill.

    The president also would eliminate the Student Loan Interest Deduction (SLID), but grandfather current borrowers who would otherwise be eligible for the deduction.

    These changes will require legislative action by Congress, but are timely with the upcoming comprehensive tax reform and reauthorization of the Higher Education Act.

    Saying, “I want the country that eliminated polio and mapped the human genome to lead a new era of medicine -- one that delivers the right treatment at the right time,” the president also announced the launch of a new Precision Medicine Initiative “to bring us closer to curing diseases like cancer and diabetes, and to give all of us access to the personalized information we need to keep ourselves and our families healthier.”

    William Elder, Jr., a third year medical student at the Boonshoft School of Medicine at Wright State University in Ohio, was a guest of the First Lady to highlight the success of precision medicine in treating cystic fibrosis.

    According to a post on the Office of Science and Technology Policy (OSTP) blog, “The potential for precision medicine to improve care and produce new treatments has only begun to be tapped. Translating initial successes to a larger scale will require a coordinated and sustained national effort.”

    The post, authored by OSTP Associate Director for Science Jo Handelsman, Ph.D., also states, “Precision medicine is not just about genomics. Health and disease are influenced by many factors. Precision medicine aims to also leverage advances in medical imaging, such as MRI and 3D X-ray technologies, utilize advances in health information technology, as well as other fields, to better understand each of these factors and to apply this knowledge in the development of new treatments.”

    Details of the initiative are expected to be unveiled in the president’s FY 2016 budget, scheduled for release Feb. 2.