More like 10% from the very top programs. It’s really top of the crop shooting for an academic position. We used to joke that it’s easier to get a Nobel prize than a tenure track position. Besides, you don’t hire people based on teaching. Getting a teaching award used to be kiss of death for tenure. In math and science, you can blame NSF for that. Research brings grant money and prsitage to university, teaching brings nothing. There’s publish or perish but no teach or die. I always regarded TAs apprenticeshi, you learn something while cleaning floor?
S2 who just started a master’s program this year (small merit schoarship, no tuition waiver) will only be able to claim the LLC this year. There must’ve been a reason I was urging him to start grad school 2 years ago instead.
S1 was a grad student at MIT. He got his PhD 3 years ago, but at no time was his RA stipend over $30K. He also learned his first year that as a RA his time was not his. His first year, he took off during March break to visit a college friend. He heard about it after he got back and never took a school break off again. Every one of his 6 years in grad school, he was asked if he would be in the lab the Fri after Thanksgiving. That was the one day he maintained as his sinc he always came home for that holiday.
And he also worked in the lab all summer throughout grad school.
My supervising professor was not happy that I took a week off during grad school to go on my honeymoon! Well, tough. It was kind of tough to realize I couldn’t take much time off since I had lab experiments going on, such as freezing and thawing polymer concrete and then testing its strength.
Before you all get excited, again what’s stopping universities calling tuition waiver tuition scholarship?
Not sure, but I assume it is important in the accounting world.
“At the Wall Street Journal’s CEO Council meeting this week, a Journal editor asked audience members to raise their hands if their companies planned to invest more should the tax legislation pass. Only a smattering of hands went up.”
Would it matter in the real world with real money? They are all nonprofits. Whether they call it deductible business expenses or other wouldn’t make a difference, would it?
This article talks about the impact of the House tax proposal on what really matters - college sports!
http://www.startribune.com/congress-closing-loopholes-in-college-sports-score/458100133/
…Additionally, the House tax bill calls for a 20 percent excise tax against the salaries of the five highest-paid executives of a nonprofit organization once those salaries top $1 million. For most nonprofits, this will have little or no effect. But for universities in general, and athletic departments in particular, this could be a very big deal…"
Several other ramifications in the article as well.
They’ve also tucked the removal of sports team tax exempt status in the bill, which I totally concur.
Me, too. Refraining college sports somewhat is for the better…I am also all for taxing 20% for salaries over $1M in both nonprofit and for-profit corporate world.
First of all, don’t they need like 1.5 trillion? This would be 1/3 of 1%.
Second, that likely assumes there would be as many graduate students are there are now. There will not be as I’ve mentioned earlier. This will break the whole enterprise at least in the short term.
Not from an accounting/tax world.
My guess, and its only a guess, is that Universities the waiver for forced labor. (Just look at a few of the previous posts regarding time off.) If the Uni was to offer a merit scholly for tuition, and then pay cash for each TA class, the Uni loses vast amount of authority and free work hours. (Some students with family money would no doubt eschew the work requirement of the TA’ship if they could.)
btw: for those students on a named fellowship (presumably still tax free), their taxes are likely to go down, with the slight increase in personal exemption.
many of the arguments made on behalf of the tuition waiver on this thread (learning, apprentice teacher, etc.) probably only apply to doctoral students not to MA students.
I have been googling stuff. That’s how I discovered that Harvard charges less and less tuition as you progress towards your PhD. The final year is virtually free. They also charge different amounts for the professional schools like law school and med school. They also charge different amounts for certain masters degrees. All regular PhDs are fully funded by the school and cost the student nothing, the “tuition” is a fiction for them. In the professional schools they offer need based grants and loans. Very few get to go for free, and they expect the parents to contribute.
By the Harvard model, “tuition” seems to be pulled out of thin air, the amounts change for no obvious reason (why is business school more than law school which is more than med school? Why are all three more than a regular PhD? Why is year 3 only 25% the cost of years 1 and 2? Why are certain masters more than a PhD?), so it seems like schools can pretty much charge what they want. Maybe there are legal reasons that public schools can’t do this, I don’t know. But it sure seems like schools have a lot of flexibility in what they charge to whom and what they call it.
I admit I know little about graduate education. I never went, none of my kids have gone yet, so I ask questions. I’m trying to learn the implications of the tax bill and see if there will be anything schools can do to work around it. If you want to reply to me, great, but how about cutting down the snark? It’s not appreciated.
Public schools do have differential pricing for grad vs. professional schools. The University of California charges law/business/med at a much different rate than a PhD. For example, out of state tuition is $17k/semseter for PhDs, but nearly 2x that for Haas MBA or Law school. (Note, its extremely easy to obtain instate rates after one year of grad school.)
heck, some public schools even have differential pricing for undergrads, with a $ premium on say, engineering majors.
As with any such legislation, there will be winners and losers. Couple that with the political polarization in our country and it is no surprise that tuition waivers might be impacted (let’s see what the final package looks like). Maybe I’m too optimistic, but all most of the predictions on this thread seem a little much.
Assuming that grad students are the bedrock of today’s college, does everyone think that the Universities will allow their teaching to grind to a halt? Most likely, they will find a loophole and work around to problem as some have suggested.
Worst case they might adjust payments to offset the tax burden. BTW, what tax rate would be appropriate? It is telling that there is discussions on which grad students “deserve” waivers and which do not. Class envy in the grad student ranks?
Release the hounds.
I apologize in advance for my questions, but I just quickly scrolled through the last few pages and did not read all the comments. I’m new at tax filing on tuition waivers and scholarships since my S is a freshman. If I understand the issues correctly, the new tax plan that passed yesterday by the House means any and all tuition scholarships and waivers from colleges for undergrad and grad students will be taxed? For someone like my S, he’ll be taxed at parent rate beginning 2018 tax year? He was awarded full tuition scholarship annually at a private college. He is also considering to RA next year in addition to TA a class next year. So then we as parents will be taxed for the housing waiver as a RA and a small stipend to TA in addition for the scholarship???
There are two separate issues. 1) Taxation of graduate tuition waivers that accompany teaching and research assistantships, and 2) Kiddie tax for full-time students until age 24. No change is proposed to the kiddie tax to the best of my knowledge.
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Under the House plan only the tuition waivers that accompany typical university provided graduate support in the form of teaching or research assistantships will be considered W-2 income and thus subject to income tax. Currently this is not the case, and the tax on these tuition waivers will dominate a graduate students living budget since their AGI will go from roughly 30K to 80K assuming 30K living stipend and 50K tuition.
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If your son is under 24, under the existing tax law, any unearned income your son earns beyond $2100 is taxed at your rate. My understanding is that a tuition scholarship in the form of financial aid or merit award is not unearned income under either law. There are some scholarships that go beyond tuition that are taxable under the current law. For example some Research Experience for Undergraduate (REU) programs award stipends from NSF for work done by undergraduates at a participating university over the summer. These students are given 1099s, and this income is unearned income subject to the kiddie tax. Some graduate students receive NSF or other fellowships. The tuition portion of these is not taxable under current law or House plans. However, the living stipend portion of these are considered unearned income (1099) and 23 year old graduate students who are awarded these fellowships pay the kiddie tax.
A full tuition waiver, i.e., merit money, for an undergrad Frosh is not taxable today and will not be taxable tomorrow (under the legislation passed by the House). It is not reportable. However, if your S also receives a stipend for Room & Board expenses, i.e., a true full ride, then that stipend is taxable today, and is reportable on his/your return.
Great question on a possible housing wavier for volunteering to be an Residential Advisor. Don’t know the answer to that question. However, the legislation appears targeted towards tuition waivers for being a TA or Research Assistant (other RA). But the devil is always in the details of the Regs, once published.
@ClassicRockerDad, @bluebayou Thank you for your reply. Yes, my S is under the age of 24 who received full tuition merit, not full ride. Relieved to learn that he won’t be taxed for the merit award. However, for 2017-2018 school year, he did receive private scholarships that covered all other expenses (housing, meals, fees, etc.) His school allowed him to stack. I know that those awards will be subject to taxes at the parent tax rate, correct? If so, are they included in the parent tax return or student tax return? My S did have a summer job where he earned a couple of thousands so I assume he’ll need to file a return.
They are on the students return but he will need information from your return to complete his return.
In response to the question: “Yes, but what percentage of PhDs spend their careers in college teaching positions?”
False. In actual fact, it depends entirely on the field. For something like economics, sure, it’s a relatively small proportion, but still nothing like 10%.
I think part of the confusion may be that you’re thinking of tenure-track positions, which are an ever-smaller proportion of faculty jobs. Include term faculty and adjuncts, and the proportion of PhDs in teaching positions goes up sharply.
Even given that, though, I haven’t run the numbers (I have a meeting in a few, and so wouldn’t be able to until later), but I’d suggest that even in the most brutal parts of the academic job market (read: American history and modern American literature) more than 10% of the PhDs end up in a tenure-track position.
Also false. Consider just for starters that the vast majority of college faculty of all sorts (tenure-track, term, and adjunct) teach at institutions that are completely teaching-focused (e.g., community colleges). Such institutions don’t get much attention on the CC fora, but that doesn’t mean they don’t exist.