Tag Archives: congress

Lessons from #GradStudentTax

The recent tax reform bill passed in the House caused much uproar in the academic community as it removed the provision in the current tax code that waives the students’ school tuition. This provision, known as qualified-tuition-reduction provision (section 117(d)(5)), allows for the waived tuition to be exempt from taxable income; removal of this provision would therefore add to the tax burden of the students, who are already living marginally with an average income of ~$30,000/year. Sackler students, who currently receive $33,500, would see their taxable income increase by ~$20,000 (annual tuition) which would push them to a higher tax bracket (15% to 25%). It should be noted that this tuition waiver provision does not affects students in their 6th or higher year of study at Sackler as tuition is not charged past the 5th year.

Fortunately, the Senate’s version of the new tax bill retains this provision, for now. It remains to be seen whether the merged version of the bill will keep or remove this provision. In the meantime, graduate students have been organizing nationwide; the Sackler graduate student council organized a call your representatives event last Tuesday. If you haven’t gotten a chance to make your voice heard yet, consider signing onto FASEB’s letter to Congress asking them to protect the waiver provision.

The fight to protect this provision has raised other questions among grad students, particularly, why do universities bill tuition and then waive it? It appears that the waiver is not done in the same manner across all private universities. For example, Cornell University considers its tuition waiver as a qualified scholarship, which is tax exempt and not affected by the removal of the provision in the House bill. But this still allows for the question to be asked as to why universities just don’t charge $0 for tuition or if they can NOT charge it after 5 years, why they can’t do it for the years before. The answer seems to lie with the fact that universities are using the billed tuition as a way to generate revenue, especially in the sciences. This may sound sinister, but the reality is more complex. As scientists & trainees supported mostly by government grants, we are all aware of the overhead & indirect costs that are involved with doing research and that a percentage of every grant awarded to a faculty member at the university is matched by the NIH and given to the university administration. This support is necessary for maintaining a research environment, but it also begs the question of whether taxpayer money should be used to fund administrations of private universities with large endowments, particularly at a time when budgets for scientific endeavors are being slashed. Additionally, given that private universities, which enjoy a non-profit status, are behaving more and more like for-profit institutions, one is left to wonder whose interests are being represented at the administrative level.

The grad student tax debate has also raised the question of the role of graduate students in the workplace. Traditionally, graduate students have been considered as trainees rather than employees and a certain paternalistic relationship exists between faculty/administration & graduate students. However, since the National Labor Relations Board’s decision to recognize graduate students as employees, thus allowing them to unionize, this trainee status is being questioned more and more. Graduate students have faced obstructions from the university administrations when they have tried to unionize, and faculty have been divided on the topic of whether students should unionize (one professor going as far to tell grad students to focus on work rather than wages). Tufts currently has a graduate student union, but the Sackler school doesn’t have one at the moment, reasons for which lie with the content student body and the lack of a teaching requirement as part of the stipend.

It seems that the tax bill requires major revisions, for reasons separate from the grad student tax. This gives us, academics, time to organize around this issue and keep putting pressure on our representatives to protect the tuition waiver for graduate students. This also allows us to have a broader discussion about the roles of graduate students in the workplace, and how universities use funds that they receive from the public through the government funding bodies. Transparency from the administration’s side is likely to win them more supporters among students and faculty alike, rather than a nebulous state of operations.