Kent State University processes risk of increased taxes on graduate assistantships

The future of graduate assistantships at Kent State University has been called into question as Congress attempts to pass legislation that will facilitate the largest change to the country’s tax code in years.

On November 16, the House of Representatives signed off on a tax bill that would dramatically rewrite the existing code. However, their plan comes with a caveat. In order to help fund cuts, the country would need to revisit a clause protecting graduate students benefiting from graduate assistantships.

What are graduate assistantships?

Assistantships are a form of work-study agreements students apply for in order to make their education more affordable.

If a student receives one, they typically work within their academic department and are responsible for a variety of tasks ranging from research and teaching to other administrative duties. This provides an opportunity to do a service for the university in exchange for financial aid.

Aid comes in the form of a tuition waiver and a stipend to offset living expenses. The amount of their stipend varies based on their responsibilities and the college they are involved with.

Although a graduate assistant’s stipend is typically below the minimum living wage of $20,717 calculated for Portage County by MIT’s Living Wage Calculator, there are several additional benefits for those who receive an assistantship. For example, this year students received additional funding to help subsidize 70 percent of the cost of health insurance through the university.

According to Dr. Melody Tankersley, Kent State’s dean of graduate students, there are 1,105 graduate students with assistantships in 2017. They would all be directly affected by this new bill.

How does the House’s tax plan affect them?

The House’s tax plan would repeal a clause in the existing law, which offers some protection to those who work at assistantships. Currently graduate assistants are only taxed on the money they receive from their stipend. In the new plan, they would also be taxed on their tuition waiver.

According to KSU’s Provost, graduate tuition is approximately $9,270 for an in-state student and upwards of $16,704 for an out-of-state student. Although graduate assistants never directly receive this money, the new plan would consider it income.

“That could increase the amount that graduate students are taxed anywhere from 150 percent more up to, I’ve seen some numbers depending on how much graduate students make, up to even 300 percent more,” Tankersley said of the plan.

These numbers vary based on the size of the student’s stipend and the size of their tuition waiver. For example, an out-of-state student attending KSU would see a larger increase in their taxes than an in-state student since their tuition waiver is smaller. Similarly, it is likely a graduate assistant at Harvard University will see larger increases because their tuition is greater According to their website, annual tuition to attend Harvard for a graduate degree is $44,816 for the first two years of a program.

Limiting KSU’s diversity in education.

Tankersley has been an outspoken opponent of the clause in the House’s tax bill. Once the bill was signed, she published a series of open letters to local Senators and Congressman urging them to reconsider.

“Our graduate students are critical to the university, critical to the mission, critical to what we do every single day,” she said. “They are vital members of our family. And so if it [the tax plan] hurts them than it hurts me. And I think this has the potential to hurt our graduate students in a very meaningful way.”

.@KentState Graduate Studies Dean advocates for graduate students… stand up speak out. Support our Grad Students! pic.twitter.com/gerH3u0Nqf

— Kent State (@KentState) November 16, 2017

Particularly, she said the clause could make graduate degrees too expensive for students who are not as financially sound. In that case they would need to rely on an outside support system to help fund their education, which every student does not have.

This would be counter to the university’s goal. At the 2017 State of the University Address, President Beverly Warren expressed a desire to work across various colleges and mindsets to nurture the mind and encourage deeper thinking. Tankersley questioned if this would be truly possible if graduate degrees became less accessible.

“Like I said in my letter, we love that we are home to everybody,” she said.

One at-risk group is first-generation students, a demographic Tankersley identified with. “I am that person. I was the first in my family to go to college to get an undergraduate degree. The first in my family to go to graduate school. I know what that struggle is like to have families who work in those low to middle income jobs and hope for their children and want them to go out and make a difference.”

Other groups that would stand to be affected include out-of-state and international students.

Shared feelings across the university.

This is a stance that has been mirrored by others across KSU’s campus since the House’s bill was first announced. The university’s Graduate Student Senate announced their displeasure with the bill’s potential impact on graduate students.

Mark Rhodes, the acting chair of GSS, said he feared the bill would compound debt issues students, particularly graduate students, already face.

Rhodes, a doctoral candidate in the geography department, received his M.A. from KSU in 2015 and opted to stay on for his Ph.D. Citing the rapidly growing department and the “superb faculty,” he has made Kent his home and intends to graduate in the spring of 2019.

He benefited from a graduate assistantship while working on his master’s degree and has similar funding as a doctoral student now. Reflecting on how the bill could have affected him had it been in place while he was in school, he estimated he would have needed to take out additional loans to get by.

“For the humanities and social sciences, and even sciences for the most part, we rely on tuition waivers and our stipends to get us through grad school without having to increase our student debt,” he said.

Although he said he would still be in school if the bill were in place, he also said the additional loans would add further, unnecessary stress. “I have $30,000 of undergraduate debt that’s deferring and that makes me nervous already. So I imagine my already high stress levels would just be that much greater.”

Building a network of advocates for graduate students.

Under the guidance of its executive board, GSS has been outspoken about the risk the tax bill poses to graduate students across the country. The National Association of Graduate Students is leading the charge, but Rhodes said the group has found other organizations to partner with as well.

In Ohio, Rhodes said they partnered up with other public universities to present a unified face. He explained that various universities’ graduate student governmental bodies have worked together frequently to release joint resolutions under the new political administration.

This is a relatively new concept for GSS, but it is in answer to a slew of new problems plaguing students.

“We have students stranded in Canada because they couldn’t get into the country because of the immigration ban. We have students affected by DACA. We have students affected by Title 9 issues. And now we have all of our students affected by this tax bill,” he said.

Dr. Deborah Smith, the acting chair of KSU’s Faculty Senate shared a similar sentiment.

“It just seems like we’re facing sort of one thing thrown by the federal government after another,” she said. She said she tries not to get Faculty Senate involved in matters of politics, but she feels a need to when the politics threaten the university and its students.

In her opinion, the tax bill is an example. “It would be absolutely devastating for graduate students and, quite frankly, absolutely devastating for universities,” she said.

Reaching out.

Both Rhodes and Smith said their organizations are attempting to respond to the bill; however, like any governmental body, they are limited by how quickly they are able to organize a response.

“One of the things about the Faculty Senate, it is not well-equipped to keep up with these fast-moving things,” Smith said. “Things are changing very quickly on an almost day-to-day basis, and Senate isn’t really equipped to move that fast.”

Instead, there is more power in members of the groups acting individually to make their voices heard. Similar to Tankersley, Rhodes and Smith have encouraged students and faculty to speak to their representatives in Congress about the bill. Rhodes in particular said it was important to speak to Republican members who have voted almost unanimously in favor of it.

Congressman Tim Ryan, Portage County’s representative in the House, came out in opposition. He is one of the 194 Democrats in the House, none of who voted it. In a statement released by his office, he said the clause regarding assistantships would make it more difficult for students to continue their education.

“We should be making it easier for our young people to continue their education, not harder. These are our future doctors, lawyers and scientists. We need a tax code that incentivizes education if we are going to compete globally,” he said, recognizing that many students have already accrued significant debt while working on their education.

Looking onward.

The future of the tax bill is currently unclear.

The Senate has been working on a tax plan of their own. Since the organization is more evenly divided between Democratic and Republican members, they have had more difficulties passing laws. Earlier this summer they struggled to find a resolution on health care.

However, in the early hours of December 2 they managed to pass a tax bill of their own. Their bill differs from the House’s in a variety of ways. One of those is that it does not include a similar clause to address assistantship tuition waivers.

Since its passing, the Senate bill has sent their bill to the House of Representatives to begin a reconciliation process. The two bodies will meet in committee to agree upon a final unified bill before sending it to President Donald Trump to sign into law. It remains to be seen if the final version of the bill will include the clause.

Forecasting a solution.

If it does make it through, it is unclear how KSU and other universities will be able to assist their graduate students. “If this passes there are no easy solutions to alleviate this new tax burden to our students,” Tankersley said.

She said one of her earliest potential solutions was to change graduate assistantships over to scholarships of some sort. However, doing so raises additional problems. Chiefly, scholarships cannot be given with the expectation that students must complete additional work to receive them.

Furthermore, the university would need to find additional funding for such scholarships.

Another potential solution would be to increase the size of a graduate assistant’s stipend in order to help offset their increased taxes. Rhodes said he believed KSU would need to consider this possibility in order to continue attracting graduate students.

“We have to stay competitive,” he said. “Other universities are going to be compensating for this loss, and we can’t afford not to.”

Smith shared a similar opinion; however, she said she feared raising stipends could pose additional problems.

“With something like this you run in this vicious circle. Because almost the only thing that the university could do to help graduate students if this passed would be to increase the graduate stipend to help cover the cost of the tuition tax. But if the graduate stipend goes up then you’re paying tax on a larger amount there, too.”

Tankersley recognized this as a potential solution as well. However she said increasing the size of the average stipend would also threaten to reduce the number of assistantships KSU could offer to prospective graduate students. This would be antithetical to her goal of funding more graduate students.

Andrew Onslow, a 2017 graduate from KSU, suggested the bill may not be as detrimental as some are expected. A former graduate assistant, he received an M.A. in accounting with a concentration in tax.

He said although the bill would affect how much graduate assistants owe in their taxes, the final cost would likely still be less than actual tuition.

“I am not sure exactly how this will impact graduate programs nationwide or every single graduate student, but I can say that a graduate degree for $1,000-$2,000 is much cheaper than what anyone else has to pay for it.  If that actually meant taking out a little bit more in student loans, it is still better than not having the degree.  Many people pay 10 times that for the same degree.”

Furthermore, he proposed students may be able to take advantage of a tax credit known as the American Opportunity Credit. The purpose of the credit is to help make post-secondary education more attainable to the average student. Onslow thought this could help offset the additional taxes for at least one year of a student’s education.

A matter of great concern.

It remains to be seen if the university and its graduate students will need to consider these various steps. But those in a position of power are prepared to do what they can to help those who may be affected.

“It honestly won’t affect me directly very much,” Rhodes said since his remaining credits are not overly costly. “But it doesn’t mean it’s not going to affect the system as a whole and many of my friends and all of my constituents.”

The future of graduate assistantships have been called into question due to passing of the House of Representative’s tax plan. See what affect it could have and how @KentState has responded here: https://t.co/0ndjWJt3c7

— Mike Nied (@MikeyNied) December 5, 2017