What is #GradTax about?
The US research enterprise is under threat by proposed tax changes that would make it difficult for all but the wealthiest students to undertake graduate training. Restricting access to advanced training would damage the nation’s ability to grow, innovate, discover new medicines, bring new technologies to market, and adapt to a changing world. On November 16th, the US House of Representatives passed H.R.1, the Tax Cuts and Jobs Act, which contains language to repeal a number of tax provisions for education. This repeal is not included the Senate’s version of the bill—now under consideration. Scientists and many others are fighting to ensure these important provisions are preserved in the final version of the legislation, slated to be passed by the end of the year.
Why should I care?
If you’ve ever benefitted from science, technology, or higher education, then you should care about this issue. Think about antibiotics—or the GPS in your cellphone—or the education provided by your local university. They all depend on graduate-level training and a skilled workforce. If the only people able to undertake research training were the independently wealthy, our knowledge—and prosperity—would dwindle. If you have any doubt, meet some of the students who would be excluded from research and learn about some of the important work that would halt in the face of these proposals.
What effect would the proposals have?
H.R.1 would remove student loan interest deductions, the Hope Scholarship Credit, the Lifetime Learning Credit, educational assistance programs, and a provision that ensures tuition waivers do not count as taxable income for graduate students.
Losing this last provision alone would add a significant tax burden to graduate students, drastically reducing their net income and likely making graduate education unaffordable for many. PhD-level students in the US are generally supported by stipends, and their university tuition is waived in return for teaching and research. Graduate students do not directly receive any portion of this tuition waiver.
What will students pay in real-world dollars?
It depends on the institution, but most students will likely see their taxes nearly doubled. Those at high-tuition schools will owe closer to four times their usual tax bill.
Graduate students in our field typically receive annual stipends of between $20,000–$35,000. Tuition varies greatly among institutions, with some state schools clocking in around $12,000 per year and some private institutions reaching $40,000 per year—and beyond.
For example, a single student receiving a $24,000 stipend from an institution with $10,000 in tuition would currently owe roughly $1,600 in taxes for 2017. Under H.R.1, this would increase to $2,600. A student at a different institution receiving a $34,000 stipend and a $50,000 tuition waiver would see a staggering increase—from $3,100 under the current law to a whopping $12,100 under H.R.1.
What can I do to help?
GSA joined other scientific societies in opposing this aspect of the bill before it was passed by the House. For tax reform to become law, the House and Senate bills must be identical, so some measure of reconciliation will have to occur between the two versions. Now, as the Senate considers its own version of the legislation, both scientists and the public need to make their voices heard.
Let your Senators know that you support graduate education and the tax-free status of tuition waivers.
Find your Members of Congress.
Additional Resources:
- Learn more about the impacts in this article from Wired.
- Read what the largest association of scientists in the nation has to say.
- Read a first-hand account of the impacts in the New York Times.
- Practical advice for lobbying Congress on this issue.
- Advice on writing an op-ed.
Share your story:
To spread awareness of this issue, GSA is highlighting some of the faces of graduate research from our community. If you are concerned about these issues, share your story and your research impacts with us via this brief form. Read GSA President Lynn Cooley’s personal story connecting graduate education with the medical treatment that saved her life.
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