Tax Plans, Graduate Students, and Bearing the Burden

Tax Plans, Graduate Students, and Bearing the Burden December 5, 2017

Study for Improvisation V (1910) by Wassily Kandinsky. Attribution.
Study for Improvisation V (1910) by Wassily Kandinsky. Source.

Most of what I write for this blog deals with, naturally enough, Catholicism. Sometimes I write reflections; other times I focus on socio-political questions. At times, I just address whatever of interest is going on in the Church. But every now and then, since I’m a graduate student, I weigh in on academia. This is one of the times.

You see, a lot has been written about the GOP tax plan. Almost everyone knows something about it. What has received some coverage (though not necessarily an immense amount) is the bill’s effect on graduate students across the United States. What will change? And why should anyone care?

For starters, the House and Senate versions of the bill are not at all the same and it’s entirely possible that when the two are combined and reworked the offending clauses will be removed. At this point, we can’t know if that will happen and so it’s important to consider what exactly the House version will do:

The new tax plan introduced by House Republicans could have negative implications for universities, graduate students and those with student loans.
Many grad students — especially in Ph.D. programs — receive tuition waivers in exchange for teaching classes or doing research. Under current law, that money isn’t taxed as income. But the new bill calls for those tuition waivers to be counted as income and subjected to income taxes.
That means graduate students would be paying taxes on money they never receive. (NPR)

Typically, we graduate students (at least those of us in PhD programs) get full tuition waivers and a stipend as recompense for our research and teaching. Expected loads various from university to university, so it’s very difficult to say exactly how much work is done in order to merit these sorts of “payment.” Regardless, we don’t make that much. The median income of a PhD student is roughly $30,000 (plus, if one wishes to include it, the waived cost of tuition), which, considering you have to have a Bachelor’s degree (and often a Master’s) in order to pursue a doctorate, is not all that much (the median income for recent college graduates in the Humanities is around $46,000). Master’s students almost always make even less.

In other words, the House version of the bill raises serious concerns about the ability of graduate students to continue with their work. I’ve had at least one friend say he’s likely to leave school if the waiver tax ends up in effect. And he’s not even from an impoverished background. The bill thus raises pretty serious concerns about the ability of non-wealthy students to participate in graduate education:

The tax reform bill passed by House Republicans on November 16 wouldn’t just slash taxes for corporations and billionaires, it would also dramatically increase the tax burden for graduate student workers by counting their tuition waivers—which they receive in exchange for their labor as teaching and research assistants—as taxable income.
Furthermore, by eliminating student loan interest rate deductions and the Lifetime Learning Credit, the House bill effectively makes graduate school financially out of reach for all but the wealthy.
“I would hope that people like me in grad school would be identified as what we are—we’re working class,” Santiago Vidales, a Ph.D. candidate in Spanish and Portuguese studies at the University of Massachusetts Amherst, tells In These Times. “We make the day-to-day of a university function.” (Salon)

It doesn’t matter if you’re a cold pragmatist or what once might have been called a “bleeding heart.” This will affect both STEM and Humanities graduate students (60% are said to be in STEM programs); it forecloses entrance into research-heavy (in the scientific sense) fields, especially for those who do not come from rich backgrounds. Academia is not generally a go-to for economic advancement, but what mobility it does offer will effectively be slashed should the House version become law.

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