Tax Reform and Higher Education

As most people involved in academia know, there is a bill going through the House of Representatives (Tax Cuts and Jobs Act H.R. 1) that drastically affect taxes for graduate students. Under this bill, tuition waivers would be considered taxable income. For in-state students this will mean an increase in taxes paid by at least several hundred dollars. For out-of-state and international students, this will mean an increase of taxes by at least several thousand dollars. The figure below shows a very straight-forward and easy-to-follow example of how this tax bill could really hurt students.

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Calculations done by Columbia student, Amanda Rose. This image is going around social media networks.

For this particular student, her useable income goes from over $20000/year to under $6000/year. The thing that I cannot understand is who does this benefit? It certainly does not benefit all of the graduate students trying to further their education. Why punish us for learning, for continuing our education so that we can (hopefully) get better jobs when we are finished with school. If this bill passes, my guess is that enrollment in the US higher education system will decline (particularly for international and out-of-state graduate students). Nobody can live on a useable income of less than $6000/year. Not even in areas where the cost of living is low. It is not possible.

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In order to “do my part” (so to speak), I called and emailed my local representative expressing my concerns regarding this bill. The letter that I received back was rather disappointing. The letter only discussed how we haven’t had a tax reform in several decades and how this bill will decrease taxes for the “majority.” There was no mention of how this tax bill will affect graduate students, even though that was the issue I called and emailed about. This response was rather discouraging. My only hope is that our representatives will think more about how this part of the bill negatively affects graduate students.

What are others’ thoughts? How will this bill, if passed as is, affect you all?

One Reply to “Tax Reform and Higher Education”

  1. I have been annoyed by the lack of discussion about this issue in the media outside of educational news outlets, like the Chronicle of Higher Education and Inside HigherEd. It seems like the goal is to do the greatest amount of “good” for the most people. If anything I think this tax bill will keep education as something only attainable by the elite who can afford education. Accessibility is already and issue for so many people in this country. Some programs require a graduate degree just to advance in certain fields.

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