A Financial Attack on Graduate Education

For this week’s blog I wanted to bring light to [what I consider] an important and distressing issue regarding the proposed GOP tax bill. For those of you who are unaware, the proposed GOP tax bill removes a few tax provisions that were geared to limiting education related taxes. One key provision allowed nontaxable tuition waivers/credits to be given to both undergraduate and graduate students. For graduate students especially, this provision is a significant tax break and in its absent students will be on the hook for substantially more taxes.

Here are some links to various news report (there are plenty to find from a number of outlets)

http://cgsnet.org/ckfinder/userfiles/files/CGS_Tax_Reform_Scenarios(1).pdf

https://www.vox.com/policy-and-politics/2017/11/7/16612288/gop-tax-bill-graduate-students

https://www.wsj.com/articles/house-gop-plan-would-affect-tax-breaks-for-higher-education-1509654398

The council of graduate schools (first link) provided some examples about what taxing tuition waivers will mean for graduate students, seen below.

As a current graduate student I find this distressing for a number of reasons. Obviously, the stipends we receive are generally skirting the edge of a living wage anyway, add in additional taxes on money we (as students) never see and you are quickly approaching a situation where it is financially unsustainable to attend graduate school. Personally, I feel that the pros and cons to life as a graduate student are already razor thin, and that the sacrifices students already make are commonly taken for granted. At what point does graduate school no longer become an option for the majority of the small minority willing to do it under the current system (especially in STEM fields were jobs [and financial stability] are bountiful on the other side)?

Do not get me wrong, I enjoy being a graduate student and wholeheartedly see the benefits that my research (and others like it) bring to the world, but in a system were applicants are already limited can it sustain an even more pervasive financial barrier to entry? I think not. As a son of a single mother who regularly worries about the financially stability of my own and family’s life, not being able to afford attending graduate school is a serious concern.

How many qualified individuals will this bill (if passed) prevent from contributing to meaningful research and education? What are the overarching impacts on brain drain and creating an education system that no longer welcomes the highest level of academic excellence? Are the benefits of (what I imagine are minuscule) the increased tax revenue worth the potential loss of highly educated workers?

I do not have tangible answers, but I anticipate them to be negative with far reaching implications. There may be benefits of some educational tax changes, but I personally do not feel like aggressively removing tax breaks for graduate students is one.

2 Replies to “A Financial Attack on Graduate Education”

  1. I was not aware of this proposed legislation (as I anticipate most other graduate students aren’t either), thanks for bringing it to my attention.
    My salary is entirely fine for a single guy sharing a house with other graduate students. My expenses are as minimal as possible and my income can sustain it well, especially here in Blacksburg. BUT, and here’s the big butt, how can the GOP think it even an option to tax college students at all? How can they even see that as moral to begin with? Our margin of income is razor thin on being able to live independently or even stay out of debt and they want to siphon even more?! I’d be curious to see the proportion of the total tax base that represents all of student tax revenue, it’s probably a decimal point compared to corporate taxes, property taxes, capital gains tax, etc. They are going to put a significant strain on our livelihood for a f***ing decimal point. I’d really like to hear the reasoning behind this, because as it reads in the posted breakdown, it’s highway robbery.
    BERNIE 2020

  2. The new tax bill is definitely disturbing. Judging from the current analysis from VT GSA, graduate students on assistantships will find ourselves not be able to support our daily life, even living in rural university town at Blacksburg. Then how can we maintain a peaceful mind to conduct research and carry on the heavy course work? As an international student from China, I would say getting a graduate degree in a majority of U.S. universities has already been not competitive on China’s job market comparing to a graduate diploma from lots of top-tier Chinese universities. If this new tax bill passes, it can be expected that lots of talented new international students will rather stay at their own country for graduate study or move on to other countries except US. I can only wish this new tax bill is just a temporal joke. Otherwise, higher education here in US will definitely be affected in a negative way.

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