Some RA/TA positions pay more than $25k. They can take out loans, no different than people do for med school, law school, an MBA, or an unfunded MA/MS. Some people can work first before getting their PhD, and then live off their savings in grad school. Some universities might increase RA/TA pay to compensate. Some have a working spouse/SO that they live with. And of course, some get parental support.
PhDs are long compared to those other programs – my kid is in a program that averages 6.8 years to complete their doctorate. So this goes on for years. And LOTS of schools pay less than $25K (and many that pay more are in high cost areas). Working first really delays getting that final degree completed (which is a problem especially for women who want to have kids, but that is a whole different topic).
What you’re saying @roethlisburger is that grad students with a 25k stipend can’t pay taxes meant for a 55-80k income and will need other people to pay it for them, parents or spouses. That it just doesn’t work.
And PhD students who don’t have “other people” will not be able to continue, thus creating a terrible loss in creativity and effectively saying that only upper middle/upper class kids can go into research in the US - selection not based on merit the way the PHD programs always worked, but selection based on parents’ money.
Some Universities may choose to increase TA pay but I doubt they’ll pay 55-80k, and any increase will be on the backs of undergrads, so middle class families will end up paying more and even more lower income kids will be locked out of their flagship when it raises tuition to reflect the new costs.
Somehow I don’t think public universities will get extra funding to cover the new costs BTW.
There’s just no way this helps anybody.
(Taking loans to pay taxes isn’t going to happen - does anybody do that?)
Working for a few years would still not pay enough for tuition and would bar the best students from getting into top programs. (The best PhD programs want people straight from college because there’s a whole discipline and habits of the mind that get lost otherwise - it’s kind of like if you want to be a professional athlete, you can’t take a couple years off from your sport).
I have to say that politicians are working really hard to find money to transfer to the top 1%.
How is this not a political thread???
Carleton College president Steven Poskanzer published an Op-Ed in the Nov. 7, 2017, edition of the (Minneapolis) Star Tribune newspaper, opposing the 1.4-percent tax on private college/university investment income.
Here is the link:
fwiw: yesterday, the Committee raised the threshold from $100k to $150k/per student. That will eliminate ~50 of the ~150 that were on the initial list.
Just so people understand this, I’m going to explain it a little more explicitly. Apologies if this is redundant for everyone, but the comments of some posters make me think they don’t understand this.
A PhD student, especially in a STEM field, typically receives “support” from his/her institution. This support consists of a few components:
Component: Value: Currently Taxable: Proposed Taxable:
Tuition Waiver: 35K - 55K No Yes
Stipend: 20-40K Yes Yes
Subsidized
Housing ? Don’t know Don’t Know.
So, suppose the student gets a 25 K stipend and a 50K tuition waiver. Do we as a nation think it is appropriate to create a tax liability on 75K for a student who only sees 25K of income? I do not think so. Depending on how brackets and standard deductions shake out, do we expect a 22-30 yr old to live on $500 a month after taxes?
Sorry, Dave. Your fact pattern is incomplete. You missed the operative words: ‘for being a TA’, as in ‘Tuition remissions for being a TA’ which is what the proposed law says.
The taxability of other tuition waivers, such as a fellowship or merit scholarship, is unclear. Or at least, the current proposal does not address them. For example, what about PhD students who do no TA work for first two years of their program, but yet still have tuition remission (full funded)? Of course it all depends on IRS regs, but in such a case, those first two years might not result in any taxable income.
Or, PhD students who have no TA responsibilities, i.e., no work requirement whatsoever? (My daughter interviewed at one of those, but probably extremely rare.) No taxability, IMO.
It seems obvious to me – none of those ways of waiving tuition should be taxable.
@bluebayou, I will admit that I haven’t read the actual text of the bill. I should do so. It is entirely possible and even probable that my fact set is incomplete. I still find the proposed changes, as I understand them, alarming. If you have any pointers to mistakes or misconceptions, I thank you in advance for correcting me.
It is my understanding that Ph.D. students still receive stipends and tuition waivers during the first year(s) when they do their lab rotations and spend more time in classes. This stipend is currently taxable, the waiver is not.
If you are saying that the waivers will only be taxable during semesters when a teaching requirement is fulfilled, you will simply see the programs remove the requirement for TAing.
Even for TAs, I just don’t think that it is appropriate to create a tax liability for students for money that they never see. Why do we want to discourage students from pursuing PhDs (or master’s students from TAing or Ph.D. students from TAing?)
I assert that more PhDs increase the long-term competitiveness of our national economy. I assert we should incent individuals to pursue this path and not disincentivize them.
Whether or not that is true in the general sense, remember that this is a partisan bill from a party whose voters generally feel that colleges and universities have a negative effect on the country ( http://www.pewresearch.org/fact-tank/2017/07/20/republicans-skeptical-of-colleges-impact-on-u-s-but-most-see-benefits-for-workforce-preparation/ ). Universities and their students may be studying heretical (to them) things like evolution, climate change, various “left wing” ideas in social studies and humanities, etc… That the PhD students are often non-white international students who may later immigrate is a further aspect that some of them may dislike.
careful, ucb, but if you go too far into political speculation, this thread is likely to get locked.
That’s what I’ve been sayin’…of course, what is possible all depends on the regs (assuming the law gets passed in its current format).
@ucbalumnus, while I do not disagree at all, I was trying to simply present the issue without regard to identity politics. Difficult these days.
The same change in the new tax law to tax tuition applies to RAs (research assistants), which is what most students are if they are not TAs. And who in the world will teach all the intro sections and labs if there are no TAs? Haha – not the tenured professors, that is for sure! Most programs have students TA for a year or two, then move to the RA role. Some times they allow a couple of new PhD students to start as RAs, but it is usually a small number.
@intparent, that was my understanding as well. The proposed bill applies to all graduate students who receive a waiver. I will check tonight if I find the time and inclination.
I absolutely promise they will not remove TA requirements. We’re too valuable as a source of cheap labor.
This runs down the various higher ed proposals - https://www.washingtonpost.com/news/grade-point/wp/2017/11/06/the-house-gop-tax-bill-would-raise-the-cost-of-college-we-cant-let-that-happen/
hot of the press from the non-partisan JCT:
thanks!