Here’s a last-minute Action Item prompted by an alarming Twitter thread about a report in the Chronicle of Higher Education that highlights a previously unmentioned aspect of the bill Congressional Republicans have produced to radically alter the tax code: Under the proposed law, graduate students’ tuition waivers would treated as taxable income.
As things stand now, one of the few financial benefits of graduate school in the sciences is that most programs provide tuition support and stipends, so that a Master’s or PhD doesn’t come at the cost of additional tuition debt. With the tuition support treated as an untaxed benefit, grad students only pay tax on stipends they earn as teaching or research assistants. That’s typically $20-$30,000 a year, sometimes lower, and often without annual cost-of-living increases. [Edit to add another important point from Dr. Chanda on Twitter: in the humanities, the stipends are usually lower, and often nonexistent, so tax-exempt tuition waivers have an even bigger relative impact.] Counting the dollar value of graduate tuition as taxable income would increase students’ tax bills — could even push a lot of them into a new tax bracket — even though the income they can actually spend on living expenses stays the same. Add the fact that the proposed bill eliminates the tax deduction for interest on student loans on top of its incredibly regressive baseline effect, and the change in the treatment of tuition support would make graduate school that much less affordable for anyone who isn’t independently wealthy, or doesn’t have family support.
Graduate students already make a financial sacrifice to choose study over a private-sector career. The proposed new tax code could cripple universities’ ability to recruit and train the best and brightest from all backgrounds.
You know the drill: Call your Senators and Representative ASAP, and tell them you expect them to oppose this bill. Edited to add: And while you’re at it, if you’re an academic, make sure your University’s President and Provost know what’s up.