Editorial: The end of affordable graduate school

As 2017 winds down, United States politicians have turned their attention to long-promised tax reform. In the early morning hours of Saturday, Dec. 2, the Senate passed the GOP-proposed tax reform bill with a 51-49 vote. The bill received nearly unanimous Republican support, and zero Democratic support. People from all sides of the political spectrum have taken issue with the proposed reform for varying reasons, but one area is especially pertinent to college communities — graduate student stipends and tuition waivers.

Our current tax code exempts “qualified tuition reduction” from higher education institutions from adding into taxable gross income. This allows a majority of graduate students to pursue Master’s degrees and Ph.D.s tuition-free, in exchange for teaching services or research contributions. The tax reform plans to eliminate that section of tax code. The Washington Post summarizes that this one edit would “imperil graduate education in the United States.”

Tax code is complex, but the elimination of the aforementioned section would essentially add the entire sum of tuition onto graduate student stipends, making their taxable income much higher than it is now. David Walsh wrote for The Washington Post that this decision would add $49,500 onto his taxable income, and result in him being taxed for “about $81,000 in gross income” when his pay is “less than half that” in reality.

This change is devastating for graduate students, both those currently enrolled and those seeking higher education in the coming years. Adding tuition into taxable income doesn’t reflect the reality of how much money graduate students have coming in and out of their hands. An article in The Chronicle of Higher Education states that many college leaders believe that taxing tuition waivers is “nonsensical and would deeply discourage enrollment in graduate school.” As it stands, the reform will increases taxes for graduate students to triple or quadruple what they’re paying now — more than enough reason to stay away from higher education programs.

Furthermore, the bill would erase a $2,500 tax deductible for people paying their student loans. It would also consolidate three higher-education tax credits into one, smaller credit, and limit the credit for students in their fifth year or more of schooling. This only intensifies the pressure on graduate students and whittles down the safety measures in place for a manageable taxation.

The tax reform bill hasn’t been signed into law yet, though it is near the end of its due process. The bill now seeks the consideration and approval of Senate-proposed amendments by the House of Representatives. If the reform passes through that stage, it will be given to the president for signing or vetoing. Nothing is set in concrete, therefore, but projections are bleak for the future of graduate students.

The Association of Public and Land-Grant Universities said in a statement about the issue:  “The current tax code helps reduce the cost of college for good reason — not just because a college education benefits individuals, but because it benefits society at large.” This tax reform is the antithesis of furthering society. We have thousands of rising leaders interested in essential fields of study nationwide. These students are seeking higher education to contribute to research and betterment of life. But this bill will cripple them when it should be lending a helping hand.