The GOP Tax Plan Places Huge Burden on Graduate Students

The GOP Tax Plan Places Huge Burden on Graduate Students

Late last week, House Republicans passed the “Tax Cuts and Job Act,” a bill they claim will cut taxes and raise wages for the majority of Americans. One group that would see a huge tax increase are graduate students. Many of them survive on modest stipends, but they could see their taxes quadruple under the GOP plan.    

Most doctoral programs come with a sticker price somewhere between $20,000 and $50,000 per year. Yet many graduate students usually do not pay the going rate. Instead, these students work as teaching assistants who conduct research and teach classes. They receive a small yearly stipend, typically between $15,000 and $35,000. Roughly 145,000 graduate students fall into this category.

The House Republicans' plan would treat waived tuition as income, which means some graduate students would see their tax bills skyrocket despite their meager take-home pay.

In an interview with Wired, Amanda Coston, a Carnegie Mellon PhD student, said she expects her tax bill to increase from roughly $2,000 to more than $10,000. Essentially, Coston would pay taxes on $76,234 (tuition plus stipend), even though her real annual income is only $32,400. (The latest version of the Senate bill does not tax waived tuition.)

Michael Stenovec, a UCLA graduate student working on his doctorate in political science, told The American Prospect that the Republican plan “hurts graduate students who work in high-cost areas like Los Angeles and at public schools without the resources to better compensate grad students.”

The higher tax burden is not the only new penalty: Interest on student loans would no longer be tax deductible. Other workers in the higher-ed sector would also suffer under the Republican tax scheme. University employees from janitors to administrative assistants have long been able to score free tuition for their children. Under the GOP plan, that valuable benefit would be counted as taxable income.

In knowledge sectors like “eds and meds,” graduate students help large research universities—as well as the regions of the country that host them—maintain a competitive edge in the global economy. A plan that forces graduate students to cough up thousands in additional taxes a year to give tax cuts to the super-wealthy is no way to build off that success. It’s actually a move that may put graduate school out of the reach of America’s best and brightest.