On Nov. 16, the House of Representatives passed H.R. 1, the Tax Cuts and Jobs Act. The bill does several things, including cut tax rates and repeal deductions. I support these concepts wholeheartedly. However, there is one provision in the bill that I just as strongly object to: the tax on tuition waivers.
In most Ph.D. programs, we as graduate students are compensated in two ways. First is a stipend from employment as a research or teaching assistant. The second is a tuition waiver. In other words, graduate students are paid a (quite modest) salary and do not pay tuition. There are nearly 175,000 of these waivers at graduate schools around the country. Currently, these waivers are not taxable income, just like employer health insurance premiums. Under H.R. 1, these waivers will be counted as taxable income. The impact of this new tax would be devastating.
The first reason is self-evident: Many graduate students cannot afford the tax burden. Nearly 60 percent of graduate students have incomes below $20,000. Taxing tuition waivers would more than double the tax burden of many graduate students. Many of us would have to borrow student loans just to pay taxes on “income” we never see.
This will have a disproportionate impact in Kansas, where institutions like Kansas State University, KSU Polytechnic, the University of Kansas, Wichita State University and KU Medical Center all rely heavily on graduate students to do the kinds of research that will lead our great state into prosperity long into the future.