Plenty of research takes place at national labs and private companies. One of my kids works at a company that hires some PhD students in the humanities for their research practice, too. I don’t know why you are hung up on whether they work for universities in the end. They’d be stuck with the same tax problem. There is a lot of smoke being blown here.
^That article is almost 8 years old.
My husband and I both have EE PhDs from Stanford. Neither of us ever spent a minute as a research professor. But both of us had long careers in research at Xerox PARC and then IBM Research. Every single EE PhD we were friends with never spent a minute as a professor. But they worked at the Jet Propulsion Lab, Microsoft Research, SRI, Los Alamos Research Lab, at multiple California start-ups, and other innovative tech companies.
Science Friday did a piece on this. There is a link in the text to an online calculator a couple of grad students developed to help students calculate the impact of the possible changes:
https://www.sciencefriday.com/segments/how-much-will-the-house-tax-plan-cost-grad-students/
I must have missed this in the overload of info, but apparently the House bill puts an end to forgiving student debt because of death or disability. How cruel is that?
Also… I was just looking over the calculations behind the calculator that is part of that Sci Friday article, and found something disturbing. There may be some changes to how health insurance provided to grad students is taxed, depending on how the university has set up the health insurance benefit. They give two examples:
- At UC Berkeley, the grad student gets a health insurance "waiver" for the university run health insurance program. Apparently under current tax law, that health insurance waiver is taxed already (more on that below). It looks like it will continue to be taxed.
- At MIT, the grad student tuition waiver includes tuition and the standard student medical plan, and there is also an extended health plan that they essentially get for free as well. In the past they haven't been taxed on the standard part of the medical plan -- but if the tax on the tuition waiver goes through, the standard student medical plan cost would be taxed as well. So the newly taxed amount would be the tuition AND both portions of the medical plan.
So I am actually very confused by the FIRST example. Why would a grad student’s who is a TA/RA getting a stipend and health insurance be taxed on those health benefits today? Other employees of other types of companies aren’t – if I work for Boeing and get health insurance premiums paid by my employer (or partially paid), those health insurance payments aren’t taxed. Is being employed as a TA/RA different? My kid hasn’t gotten her first W-2 yet, so I can’t check to see if/how her health insurance benefit is taxed.
My health insurance (which the university pays fully, not me) isn’t taxed.
And… it also sounds like the Senate bill may have left the Lifetime Learning credit in place (which grad students can take). House bill removes it, so we shall see.
It would make them just like every other consumer debt. Not forgiven on death or disability. Now it may not matter because there might not be a big enough estate to collect the debt from and if a disabled person can’t work, then there is no way to collect. Is it cruel for Visa or B of A not to forgive your debt on death or disability?
One difference is that student loans are not discharged in bankruptcy where most other consumer debt is, but congress made that change because too many ex-students were borrowing as much as they could because they knew they were going to declare bankruptcy immediately after graduation. I remember a guy telling me he was buying as many consumables as he could (a stereo, a guitar). His feeling was Why Not? At that time everything was erased. No big deal.
This tax bill is just the beginning.
From today’s Washington Post.
Social Security and Medicare are NOT entitlement programs. I have been paying for both for a very long time.
Only IF the student has an estate that has assets to repay. When my dad died, he had NO assets…and all of his debts were forgiven. He didn’t have much in debt…a small credit card bill very small, and some hospital bills. Both were wiped away…because NO ONE else had signed as being responsible for them.
When my mom died, she had a small estate, and her small amount of bills needed to be paid before the estate could be settled.
While true, there is only a loose connection between contributions and eventual post-tax payouts. For this reason, they can reasonably be called entitlements. This article sheds some light on the issue:
And note (Romani), if you put a 1 in the Fellowship cell, the taxes of generic student goes DOWN (assuming that their math is correct(.
^ What
So the Senate bill does not change the deductibility of student loan interest or tax the tuition waiver as income? I am reading an LA Times article from a day or two ago and these tax provisions are changing fast. Is this right?
Well, no one has read the bill fully. But I’ve seen no mention so far that those are in the Senate bill.
I agree that the fastest path to success assuage with ups ne for the house to accept the Senate bill. But Ryan has minimal control over his caucus. We will see.
“Well, no one has read the bill fully.”
Ask yourself how you feel about your elected officials voting on something so important and affecting you so much that they don’t understand. Nauseating.
The Senate version does not tax the tuition waiver. Not sure about deductibility of student loan interest.
https://www.insidehighered.com/news/2017/12/02/tax-bill-key-implications-colleges-clears-senate
I am concerned about the excise tax on private institutions with large endowments. My D is at such a school, and other D who is a senior has applied. The only reason either could consider the school was because they are incredibly generous with financial aid. I worry that they will have to cut back on FA because of this bill. 
@doschicos - In time, we will all have a chance to Vote on our elected officials. Hopefully, many will find themselves out of office.
I saw something yesterday about only taxing the endowments that had an endowment amount of over $500K per enrolled student. Maybe 40-50 colleges on that list. But I am vague… I am not sure if that is what ended up in the Senate bill or not (sorry). And I see autocorrect on my phone mangle my last post. 
@intparent – $500K threshold is correct. It is in the article linked above by @suzy100.
Like the House bill, the Senate legislation imposes a new 1.4 percent excise tax on the largest endowments held by private colleges. But thanks to an amendment offered Friday, the tax will apply only to endowments valued at $500,000 per full-time student. Previously, that provision would have applied to endowments valued at $250,000 per student.