Welp, the House passed it 227-205.
Yup. I’m shocked. Shocked!
Rich colleges will just gross up their wages to cover the taxes so they don’t lose their cheap labor. Or bump up undergraduate tuition a bit to cover it. How many students per TA are there, typically? Or find some other way to mitigate it.
@romanigypsyeyes wrote
How was this number calculated? That seems very high, especially if you are in-state at a public university.
It’s a sucky policy if it sticks, but it’s not going to be the end of graduate education.
Really? You think it’s high?
Let’s see.
It nearly triples out taxable income. And it throws us from the 10/12% bracket to the 25%.
Voila.
Eta: tuition is just under 50k per year that we get waived.
I agree that taxing tuition waivers is a terrible, horrible, no good, very bad plan.
Has anyone heard whether it would work for colleges to make graduate tuition FREE but make sure graduate degree plans require course credits for ~10 semesters of TA or research hours as part of a PhD degree? The stipend to cover housing/food would still be taxable, but tuition wouldn’t be if this is a viable workaround.
Might be a problem at institutions where STEM grad students get waivers but humanities students don’t get full waivers now.
Worse even is the elimination of the medical expense deduction. That will affect sick seniors most of all. Seniors who need home health aides for example would lose the deduction.
Taxes need to be reformed no doubt. But this bill is a loser.
Tax cuts for individuals temporary. Tax cuts for corporations permanent. That’s all you need to know.
^^I’m going to come back in 5 years to remind you of this assertion.
The numbers Romani is giving are absolutely correct. Posters have explained this in numerous posts on several threads. Students in graduate school now will not be able to afford their taxes on their stipend income. This isn’t debatable. It will be the end of graduate studies in some places.
eta: I am actually going to bookmark this so I can come back and say “I told you so” - not so much to pick on you, notrichenough and bluebayou, but remind a population that doesn’t understand how dire the situation is for higher education in this country that they were warned at the time. 
Wonder if/how this will effect scholarships from the government with required work commitment after graduation like the CyberCorps scholarship?
What will public universities do? My kid is a TA at a state university. Most colleges aren’t “rich”. Remember that these students will be hit with:
- Taxing their tuition waivers.
- No Lifetime Learning Credit (now allows those students to take 20% of fees they pay to their universities, which can be pretty significant, and take a direct federal tax credit for this).
- State taxes will go up on them as well unless states adjust their laws. My kid lives in a state with a 6% tax rate for her stipend (she'll be bumped to an 8% bracket if the waiver is taxable) -- that is not insignificant to add a 6% or more tax on that waiver with no income increase.
I guess profs can go to more machine graded exams, and students can try to get along with bigger sections, fewer office hours, and less tutoring (that is a role that my student plays – she staffs a tutoring classroom for her major as part of her responsibilities). I think in general, undergraduates will get less bang for their buck, or pay more if colleges decide to bring in more revenue someplace to cover this. I will say that I remember having some GREAT TAs during my undergrad years at a public university – in fact, I got a lot more direct instruction and help from TAs than I ever did from profs. It is a shame that this bill will take some of that away.
Passing bills that gut teaching resources and research by our country’s universities is absolutely appalling.
In the current house plan, that I’ve seen, for married filing joint, the 12% bracket goes all the way to $90,000, and that’s after the $24,000 standard deduction. So it would take at least $114,000 in income to reach the 25% bracket.
If it triples your taxable income, and your tuition waiver is worth about $45K (which is pretty much the highest tuition anywhere, approximately), you would never get out of the 12% bracket.
Aren’t you in-state? What is your tuition waiver worth?
But not surprising, since that is probably the goal.
Just?!?
You don’t quite understand the economics of the higher-ed sector, do you?
^People with no understanding keep making very authoritative posts about graduate education.
If posters are happy to get rid of graduate programs at the majority of state universities and many privates, I can understand their point of view even if I vehemently disagree. But when posters are advocating for policies with repercussions they don’t believe will come to pass…
I just want to bang my head against the wall.
Romani - I am so very sorry.
“…make sure graduate degree plans require course credits for ~10 semesters of TA or research hours as part of a PhD degree?”
That is already a current requirement.
@BunsenBurner So, if the requirements are already taken care of in degree plans, is there a difference from the university’s fiscal perspective between calling it a “full tuition waiver” vs “tuition = $0” for grad students? From a tax perspective, under the proposed plan, does “tuition = $0” mean significantly less tax than “full tuition waiver”?
From CNN:
“The 13 House Republicans who voted “no” on the tax plan
Rep. Dan Donovan (New York)
Rep. John Faso (New York)
Rep. Rodney Frelinghuysen (New Jersey)
Rep. Darrell Issa (California)
Rep. Walter Jones (North Carolina)
Rep. Peter King (New York)
Rep. Leonard Lance (New Jersey)
Rep. LoBiondo (New Jersey)
Rep. Tom McClintock (California)
Rep. Dana Rohrabacher (California)
Rep. Chris Smith (New Jersey)
Rep. Elise Stefanik (New York)
Rep. Lee Zeldin (New York)”
@Ynotgo - I am not an expert on how research Us account for those things. I have a kid who is a recipient of tuition waivers who has one more year to go. I am very mad.
Some students pay for their masters (or for that matter, their PhDs). Not many, but there are some. Some colleges have the same pricing per credit hour for programs that ARE paid for by the student like business or law. Just saying grad student tuition = $0 would cost the college revenue in other ways. Plus, it could be considered tax evasion to just make that change if this passes into law.
And I’m going to guess some of those who voted “no” didn’t do it from the goodness of their hearts. Either the bill wasn’t conservative enough for them, OR they were given cover by leadership to vote no because they’d whipped enough yes votes, and these are Republicans in vulnerable districts whose re-election chances would be enhanced by a “no” vote.
@BunsenBurner Interesting that they are almost all from solidly blue states. Worried about re-election, no doubt.