Graduate students are panicked over a provision in the GOP tax plan — unveiled by House Republicans Thursday, Nov. 2 and approved by the House Ways and Means committee Thursday, Nov. 9 — that would count the tuition waivers they receive from their universities as taxable income.
Many graduate students receive free tuition, as well as a stipend, to compensate for their research work and teaching classes. At UCR, academic graduate student employees and researchers are exempt from not only tuition ($3,834), but also from the Graduate Student Health Insurance Plan Fee ($1,188.06) and Student Services Fee ($376). What they do pay are miscellaneous fees specific to the campus, such as the Rec Center and Student Tech Course Materials fees.
The House’s provision to consider the money each graduate student is remitted from paying as taxable income is part of a sweeping tax overhaul aimed at aligning with Republicans’ low-tax and small-government goals. The bill carries further ramifications that Shawn Ragan, president of UCR’s Graduate Student Association (GSA), believes “current graduate students and any undergrad looking to go to graduate school should be very concerned about.”
In addition to taxing student fee remissions, the legislation proposes to disallow tax write-offs such as student loan interest and proposes a repeal of the Lifetime Learning Credit, a credit which reduces one’s taxes related to tuition or other educational expenses dollar-to-dollar for up to $2,000 per year.
UC teaching assistants, on average, earn around $21,000 a year over nine months before taxes and educational costs are subtracted. Ragan estimated that the House plan would almost double the taxes of most UCR teaching assistants and, in some cases, make it near impossible for students (both undergraduates and graduates) to continue their education.
“This is, in my opinion, certainly a death blow,” stated Ragan. “I have friends and colleagues who have said if this goes through, there’s no way they could continue in graduate school. They’re already struggling, they’re already food insecure … it will again become something where graduate school is only for the rich.”
The UC estimates that, if implemented, the proposed policy will increase the amount of federal income tax a graduate student pays by approximately $2000 per year, amounting to over $200 less per month in take-home pay. For those paying non-resident tuition, the UC estimates them paying over $3000 more per year in tax. A calculation by UC Irvine projects that the plan would ultimately increase graduate students’ tax burden by 202 percent on average.
In an effort to help stop the bill, the UCR GSA is organizing a phone bank to call local representatives as well as provide information to students, staff and faculty. The event will be held in the Grad Lounge (HUB 333) from 11 a.m. to 1 p.m. on Thursday, Nov. 16 and is open to all staff, students, faculty and administration.
“This is an issue that directly effects (sic) graduate students — both current and anyone who plans to attend graduate school in the future,” wrote Ragan in an email. “Graduate students should get (an) advocate for themselves, their peers, their colleagues and their undergraduate students who may one day wish to (attend) graduate school themselves.”
The GSA also plans to visit congressional district offices to vocally oppose the legislation. For more information on their lobbying efforts, the GSA recommends contacting Legislative Liaison Holly Mayton at ll.gsa@ucr.edu.
Update (11/14/17 – 11:14 a.m.): This article was updated to reflect more recent projections on the tax provision.
