Grad student tax burdens could quadruple. What that means, why it’s happening, and what we can do about it.
The tax plan being debated in the halls of Congress is going to greatly limit access to graduate education. The version passed by the House counts as income the tuition waivers received by grad students on fellowships or assistantships (that’s just about everyone not in law or med school). The result is a huge tax increase for students making next-to-nothing.
Here’s how it works: most graduate students teach and/or do research for the university in exchange for a small living stipend and not having to pay tuition. While some in the hard sciences get more, those stipends typically hover just above the poverty line for a full-time workload (ask anyone who works in these alleged “20-hour a week” positions that are exempt from the Fair Labor Standards Act). Tuition waivers are far more valuable, wiping away an expense that would be double to triple the income earned from the stipend. That’s not income grad students ever see, nor is it a tax deduction they have to claim; it’s just an expense they don’t have to pay. But taxing that as income can take a potentially catastrophic chunk out of the actual stipend money a student has to live on.
I ran the numbers on my graduate education. Here’s how the changes in the House tax bill would’ve increased my tax burden by counting my tuition waiver as income (pre-deductions for simplicity):
Master’s: Tax rate increases from 10% to 32% of actual income
Doctorate: Tax rate increases from 12% to 50% (!) of actual income
I was fortunate. I got a Master’s degree in-state and lived rent-free with family. With those discounts and a few part-time jobs, I made it work. And maybe, under the new plan, I could still float that.
But a Ph.D. with 50% of my actual income going to taxes? I literally couldn’t have afforded rent in a dirt cheap college town.
I could not have become an educator.
And lots of other would-be graduate students in lots of other fields would not be able to reach their aspirations because Uncle Sam priced them out of it.
Many graduate programs are the purest remaining pursuits of knowledge & creativity. They don’t end in high-paying jobs that make shouldering years of debt feasible.
Arts, humanities & social sciences, particularly, are going to get crushed by this.
Of course, STEM folks are saying it’s going to kill STEM too. And, honestly, that’s a more compelling argument to Washington, because it more directly threatens economic growth.
I think these programmatic statements have a lot to do with the silos we live in as graduate students and the precision with which we learn to make claims. We talk about our disciplines because they are the ones we know and have experienced.
Let’s be clear: This threatens all of us.
Let’s be clear again: Our fate rests in the hands of Senate Republicans.
Continue reading “The grad student tax is an attack on higher education. Let’s try to stop it.”