The GOP call to eliminate tax breaks for students will deliver relatively small savings to the federal budget.

But it could have a sizable impact on people struggling to afford college.

The Republican tax plan unveiled Thursday would cut taxes by $1.5 trillion over the next decade, largely by delivering significant tax savings to corporations. To offset some of that lost revenue, it would also eliminate tax breaks for education totaling $65 billion over the same time period. 

"They are cutting resources with no plans to reinvest that money to help people better afford higher education," says Jessica Thompson, policy and research director at The Institute for College Access and Success (TICAS), a nonprofit focused on making higher education more affordable. "This will raise the cost of borrowing for many people and raise the cost of college."

More About Paying for College

Here are the higher education tax breaks being targeted:

Student loan interest deduction. Borrowers paying off education loans would no longer be able to deduct up to $2,500 of interest paid on student loans.  That deduction doesn’t yield big savings: a maximum of $625 annually, while the average amount taken is much lower, just $202 a year, according to the American Enterprise Institute. The deduction also tends to help higher earners. That's because a deduction reduces taxable income, so it doesn’t help people who don’t earn enough to owe taxes. But it’s a popular tax break, used by about 12 million people a year, and benefits people who have higher levels of debt.

Tuition discounts for college workers. Employees of nonprofit universities and their dependents who get tuition discounts from their schools will now have to count the discount as taxable income. Colleges say it’s an important employee benefit that helps them recruit workers. Tuition waivers that graduate students receive when they work as teaching assistants or researchers would also be taxed as income.

Employer tuition and debt assistance. Currently, workers who participate in tuition assistance plans can exclude up to $5,250 in tuition from income taxes. Also being cut: a tax break for employers providing workers help with paying off student loans.

Coverdell Savings Accounts. Coverdells, in which you can invest money tax-free if you spend it on qualified education expenses, including both college and K-12 tuitions, would be phased out. Existing Coverdells would be rolled over into 529 plans, and 529 savings can be used to pay elementary and secondary school education expenses, as well as college costs.

It's Not All Bad News

Thompson says she agrees there's a need to simplify the tax code as it pertains to education expenses. “The current web of higher education tax benefits is complicated for people to figure out how to use,” she says. "But we don’t think you should gut these benefits if you're not going to reinvest the savings into other ways to help people afford higher education.” 

Still, Thompson sees some positive aspects to the changes proposed, too. The GOP tax plan would also:

Eliminate income tax on some types of loan forgiveness. Under current law, if a person with federal student loans becomes permanently disabled or dies, their debt will be discharged. But they or their heirs would be taxed on the amount of the loan forgiven. That would no longer be the case.

Beef up tax credits. The American Opportunity Tax Credit would be extended from four years to five. The way it works now, you can get up to $2,500 a year back on your taxes if you spend $4,000 on tuition and fees. The proposed plan would give you another $1,250 credit for a fifth year.