Tax Overhaul Threatens Negative Financial Impact On Graduate Students

By Anthony Calvaruso

The United States House of Representative and Senate have both passed bills proposing a massive overhaul to the current tax system in the United States.

As House and Senate Republicans prepare to meet in conference committee, graduate students around the country fear that the House provision removing the existing tuition waiver will be included in the finalized version of the bill.

Once a cohesive bill is drafted, both chambers will again have to pass it in order for it to become law.

Mark Rhodes, a Ph.D. Candidate and Teaching Assistant at Kent State University, explained that on average a Kent State graduate assistant receives $12,000 a year as a stipend for living expenses. In addition, the cost of tuition is waived. This, on average, is $9,000.

“With this tax bill instead of paying taxes on $12,000 on average, a Kent State student would be paying taxes on $21,000, as if $21,000 was our income,” Rhodes said.

Current graduate assistant Travis Watson, who works in the political science department, made clear that the tuition waiver is not given as income.

“Typically how the tax system works is you earn this money and set aside a little bit of it so you can pay your taxes,” Watson said. “I’m not getting this money, Kent State is getting this money for this tuition waiver. A lot of students don’t like the idea that they now have to save extra out of this already small income that they have.” 

Kyle Reynolds, Director of Student Services for graduate studies, recognized the important role graduate assistants have at Kent State.

“In general graduate students, especially graduate assistants, serve a really vital role on this campus,” Reynolds said. “As teaching assistants, as research assistants, and doing administrative work across campus.”

Rhodes and Watson commented similarly on their motivation to pursue graduate education.

“We’re not in it for the money, we’re in because this is what we love,” Rhodes said of graduate students.

“You go to graduate school because you enjoy learning, you want to join this field and make contributions within this field that largely goes beyond money,” Watson said.

Should the tuition waiver become taxable, it could deter students from pursuing a graduate education.

“I think that would certainly have ramifications on course loads for instructors because teaching assistants serve a big role in teaching courses across the university, especially introductory courses for students,” Reynolds said.

It could also force those who are dedicated to a graduate education to take out student loans, which goes against the traditional understanding of how the system works.

“Once you go to graduate school, especially in the social sciences, the norm is you don’t pay for graduate school,” Rhodes said. “We can’t be expected like a law degree or a nursing degree to take out massive loans to get this degree, when the jobs we’re going to get are going to be $40,000 starting out possibly.

One of the main purposes of a tax overhaul is to simplify what is widely considered a complicated and inefficient system.

“I can recognize the value in reducing deductions and lowering the rates,” Watson said. “The problem is under the current system you’re reducing deductions which hurt poor and middle class people and then not really lowering the rates for them.”

Sherrod Brown, Democratic Senator from Ohio, echoed this sentiment in a statement given through Matthew Keyes.

“We shouldn’t be raising taxes on students to pay for handouts to corporations that ship jobs overseas,” Brown said.

Senator Rob Portman’s press office recorded my contact information, but did not respond to my query.

Additional taxes would also hurt graduate students, because unlike undergraduates many of them live on their own. They may also be married and have children to support.

“Even just trying to keep a car, that’s my biggest problem, just trying to pay to keep your old used car running out of your small stipend,” Rhodes said.

 

Student Loan Interest Deduction

If you make – Less than $65,000 a year

And make all of your minimum loan payments on time

You get – a $2,500 tax deduction

This is also eliminated in the HOR version of the tax plan

 

Taxing graduate students tuition waiver would place a burden on Kent State University as well. Dr. Melody Tankersley, Dean of Graduate Students at Kent State, explained the impact.

“If we could only fund as many students as we had available money to fund we would have maybe a handful of graduate students,” Tankersley said.

The Graduate Student Senate at Kent State, where Mark Rhodes serves as Executive Chair, has worked to contact legislators from Ohio and explain to them the impact this would have. This goes in opposition to the primary function of the Senate, which is providing research and travel funding for graduate students.

“We’ve never seen things like this before. It’s new territory for us and a lot of time we don’t have,” Rhodes said.

With the possibility of such legislation impending, it has caused graduate students to consider the motivation behind it.

“I think they just saw that this is money, we could cut it, they’re just students, they’ll be fine, take out loans,” Rhodes said. “I just think there wasn’t much thought in it.”

While this legislation would hurt graduate students, it’s important not to exaggerate the effect it will have.

“It’s not like this is going to destroy the education system and stop all students from becoming graduate students,” Watson said. “But it will hurt, I want to be clear about that.”

The potential legislation has, however, made the roll of graduate students a national and local hot topic.

“I feel that we are at that point now because of this issue but I hope that we can stay there at least somewhat,” Rhodes said.

Curious how the proposed tax plans may effect graduate students and colleges…read more here…https://t.co/zzpSr8RbeE #JMCRPP

— Anthony Calvaruso (@CalKentJMC) December 6, 2017