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Taxing Graduate Students

Today’s blog post will be of interest mostly to US readers, since it concerns the US tax code. There has, of course, been a huge push recently for an overhaul of the tax system, with bills passing both the House and Senate. I am not, absolutely not, going to get into the details of either one – their wisdom, desirability, possible effects, etc. That’s not the blog I write. This bill is a massive collection of massive topics (fiscal, political, philosophical), and there are plenty of other places to argue them. Except there is one provision that is in the House bill (but not in the Senate version) that would have a big effect on the education of chemists (and scientists in general, and a lot of other people going to graduate school).

That’s the tuition waiver tax benefit. As it stands now, when a graduate student is given a tuition waiver (as is almost always the case in graduate science programs), this is not counted as taxable income for the student involved. The House bill would change this, which is something that would have an immediate impact throughout graduate education. We can argue about whether the current system produces too many graduate students and what kinds of students it produces, but I think that there is general agreement that any changes should not include first hitting the entire thing with a stun gun.

A number of people sounded the alarm about this after the House bill passed, but I’ve been taking a “wait and see” attitude about what would come out of the Senate. Now the bills will be reconciled by a House-Senate conference committee, unless the House just moves to adopt the Senate bill, which I think is less likely. That means now is the time to speak up and tell your members of Congress that you want the House bill’s provision on tuition tax waivers to go away in committee.

Here’s how to do that: first off, concentrate on your particular House district, since that’s where the tuition tax came from. Unfortunately, given the current environment, the first thing to ask is “Am I represented by a Republican or a Democrat?” If the latter, you should call your representative’s office anyway, but I would have to say that it’s less crucial, because the final bill will almost certainly be voted against by 100% of the Democratic members. So that’s pretty much fore-ordained. But if you’re in a Republican district, speak up immediately. Here’s how to find your representative, and how to contact them. But. . .

Do not bother contacting representatives if you don’t live in their district. That can actually be counterproductive, since (1) it ties up time that might be taken by their own constituents getting heard, and (2) a pile of out-of-district messages can be interpreted as some sort of outside targeted campaign, which gives the Representative (and their staff) a way to dismiss the whole position being argued. What gets a House member’s attention is an upswell of messages that are identifiably from their own voters, so you’ll want to give your name and where you live. It would help very much if you reference the fact that you are well aware that 2018 features midterm elections, and that you will be voting with the memory of this decision in mind. This is a minor enough section of the bill that it has a correspondingly greater chance of being altered by constituent pressure, and I don’t think that there will be many individuals calling in agitating for graduate students to be taxed.

As for the Senate, here’s how to contact them. The Republican/Democratic split applies here, too, since the Senate bill passed strictly on party lines. And remember, the Senate bill (which you may well have other strong feelings about) at least did not have the tuition tax idea in it, so the idea is for that part to stay as it was passed.

To the best of my knowledge, the members of the House-Senate conference committee have not been announced, but that would be a good thing to keep an eye on (today and tomorrow). If you are a voter for one of the people involved in the conference, so much the better – be sure to make your views heard to them. The Republicans in both the House and Senate are desperately trying to get this thing passed before the holiday break, so now’s the time.

73 comments on “Taxing Graduate Students”

  1. Richard Keats says:

    Hi Derek,

    To my understanding, instead of charging $X for tuition then issuing a $X tuition waiver, a university can simply charge zero graduate tuition. Then there is no additional tax assessed on graduate students.

    There would be some accounting work involved, and grant-making agencies would need to shift some numbers around. What is typically allocated to ‘tuition’ might now go directly to overhead, or some such.

    It wouldn’t be a completely smooth transition, but it would certainly be possible, unless I’m misunderstanding, which means the tax bill won’t imperil the future of scientific education, like everyone seems to be making out. I am a little confused as to why I have not heard many people point this out (perhaps because people seem to view the proclamations of university administrators and grant-making agencies as analogous to, and as unalterable as, Papal letters?).

    1. IRS man says:

      I’m no expert, but I’m pretty sure the IRS requires institutions to claim the market rate for their services on their taxes. And the easiest way for the IRS to judge the 2018 market rate is to see what the university charged in 2017. So no way is this gonna fly.

    2. Bagger Vance says:

      Gee, i’m sure no one would exaggerate the negatives of this (or any) bill just to try to sway undecideds in their favor.

      I’m with Derek on the “wait and see” here, the number of times the sky has fallen on some tax bill provision seems somewhat small, and given the narrative optics I put the likelihood of passage somewhat low. The “postdocs deserve overtime” of a couple of years ago never came to pass, either.

      Still, I am amused by the GTFs furiously working the campus email system for support. Good work with the March on Science, folks! Surely screaming that you were 100% opposed to the GOP was never going to weaken your position.

      1. Mike Gilson says:

        To Bagger Vance, regarding the assertion that postdoc overtime never came to pass:

        Actually, this did have big consequences. As this was coming down the pike, the NIH increased standard postdoc stipends to a level that would make them exempt from overtime requirements. This increased was adopted by my university as well (UC San Diego). This boost in pay stuck even after the overtime requirement was rescinded.

        Thus, the postdoc overtime requirement did not lead to overtime, but instead to a substantial salary boost.

      2. Humulonimbus says:

        I worked really hard to try and get conservative voices onto the MFSLA stage. The closest we got was a speaker from RAND. We are going to try again next year with more lead time to get science-supporting Republicans (or at least conservatives) to participate.*

        Yes, lots of liberal partisans jumped on the bandwagon for an opportunity to bash Trump, but that’s not what we (at least in LA) were aiming for.

        I don’t hold the GOP accountable for what the extremists on their side say or do. I hold them accountable for their party line, which now includes this tax bill. I hold the current administration accountable for what its appointees are doing in the EPA and other agencies. There is still plenty for scientists to be objectively pissed off about.

        * It’s not a coincidence that many reasonable conservatives (like Derek) can’t stand to be associated with the GOP any longer.

        1. Kent G. Budge says:

          I am a conservative who is no longer a Republican and did not vote for Trump.

          I’m still not going to jump on the March for Science unless you do a better job of showing that it isn’t a Democratic Party front. Because I loathe them as much as the current crop of Republicans.

          1. Passerby says:

            Yep, as long as the MFS remains unfriendly to centrist liberals and conservatives and lets their far left “diversity” platform dictate the agenda, I cannot be on board either.

          2. Humulonimbus says:

            Appreciate your feedback along with Passerby’s. A few points to make:

            1) Science has a diversity problem, and it shouldn’t be ignored. MFS is not the only organization that recognizes and wishes to address the issue.



            That doesn’t mean it needs to be the central issue, and it isn’t. The central issue for MFS is the propagation and normalization of anti-science. Should be a concern to anyone who values science regardless of political stripe. It’s not ok to make up your own facts or suppress data that undermines your position, whether that position is about climate change or vaccine safety or any other topic where scientific evidence should be the primary driver (that’s most topics).

            2) Though we all communicated with one another and DC organizers leading up to the 2017 event, each city has its own leadership team. Some city leadership teams are more centrist than others. Don’t judge individual cities by what DC is doing, or vice versa.

            3) If you think MFS is doing the wrong things for the right reasons, communicate with the city organization closest to you. Tell them (constructively, as you have here) what it would take for you to give your support. If you live near LA, that would be me. It is a bona fide grassroots movement, with individuals at the helm, not the Democratic party.

          3. yp says:

            I agree with you. Please leave politics out of science. Political agenda from either left or right is the antithesis to the true meaning of science.

    3. DanO says:

      Even if the universities changing the accounting to mitigate this, I see two problems:

      1) Universities are often slow-moving bureaucracies. There could be a year or two when the current or incoming students see their tax bills skyrocket, before reverting back to normal.

      2) If we assume that the universities will find a way around this, then the various accounting scores of the bill shouldn’t assume that this revenue will actually be collected.

      1. Anon2 says:

        RE: #2: compared to the federal budget, the amount of money involved here is de minimis. So estimates of revenue don’t need to be adjusted. So, you may ask, what it the point? To beat on people who bring up unpleasant facts like global warming.

  2. McChemist says:

    Can’t universities just run an end-around on this sort of thing by changing how they charge tuition? Rather than the ‘such-and-such grad program costs $X, and all students get a tuition waiver worth $X’ model that is currently in place, can’t schools just change that to ‘such-and-such grad program costs $0’?

  3. Emjeff says:

    So, graduate students aren’t the only ones getting tuition waivers at universities. Athletes get them too. Are the meat-head football players going to pay taxes on their tuition waivers? Somehow, I doubt it…

    1. b says:

      Scholarships and fellowships are not treated in the same manner as tuition waivers. Athletes do not get tuition waivers, they get scholarships. I’m sure you’d be hearing a massive amount of uproar from a much larger base if scholarships became taxable under this plan.

  4. passionlessDrone says:

    > Are the meat-head football players going to pay taxes on their tuition waivers?

    Probably depends on if they stand during the anthem.

  5. LF Velez says:

    I believe that what athletes get are “scholarships”, which typically also have some nominal grade-point average attached to them [if not, many schools would dispense with having tutors to keep them NCAA-compliant]. However, there are other programs that use tuition remission: all Ph.D. programs in the humanities have some level of tuition remission, separate from the ‘stipend’ given in return for teaching classes or being a research assistant. The ‘stipend’ was taxed; the tuition remission was not. To give a picture from 20+ yrs ago, that meant the $6K earned each academic year was taxable, and SSA/unemployment taxes were taken out from that… But because grad life was viewed as ‘voluntary poverty’, if a semester rolled around and a grad student didn’t have a course to teach, he or she could not get Unemployment benefits. If my tuition remission had been counted as income, I would have been ‘seen’ as earning 46K…..

    Perhaps grad students will need to become miniature businesses, so as to define tuition dollars as “pass-through” costs?

  6. Dr. Venkman says:

    As Derek notes, this tuition tax provision may well be eliminated in conference committee. Some historical perspective might be helpful. Graduate schools deal with the tax implications of the student/employee status in all sorts of interesting ways. I view the latest tax proposal as just one more financial wrinkle that will be sorted out by the affected parties in due time. The details escape me, but I vaguely recall changes in the tax status of graduate student stipends, fellowships and tuition being adjusted around the time of my graduate studies in the early 90’s. More recently, in 2016, the previous administration threw us all for a loop by forcing a minimum salary of $47,476 for all postdocs. I cautioned restraint, but HR administrators at my institution, like many, leapt at the chance to implement the new labor rule. Not surprisingly, the rule was struck down and we are all now stuck with policies that effectively reduce the number of postdoctoral positions available. If nothing else, programs will bump the stipend levels for PhD students by $2-3k to defray the new tax liability if they view it as an important factor in competing with their peers for top students. At least in this situation the policy in question is being proposed as a part of legislation, rather than implemented as a rule devised by unelected members of the federal bureaucracy that governs labor. Panic in some quarters notwithstanding, the sky is not falling.

    1. Grad student says:

      2-3k? That would barely cover the tax burden of a very cheap in-state public tuition waiver. Remember, most of these tuition waivers will be taxed at 25+% as per the current brackets.

  7. Gradstudentchemist says:

    After discussions with our graduate dean, apparently, most funds at our institution (and others) for graduate student tuition originate from the NSF/NIH and other gov. agencies, based on grants involving TA-ship and educational practice. These type of grants are ubiquitous and CANNOT be re-marked as scholarship tuition, due to their origin source being a government grant which states specific requirements, the university cannot change these millions of dollars of funds as something they can give away as a free scholarship.

    Thus that Forbes article which suggests all universities can “switch” tuition to scholarships is COMPLETELY WRONG. There is no way getting out of this, if it passes, our administrators cannot even devise a plan at the moment- all roads lead to nowhere good.

  8. Old Timer says:

    I am a little confused by this. Graduate students at my chemistry department are not charged tuition (I’m not sure if it’s called a tuition waiver), but the faculty pay the student’s tuition to the university. So the university is still getting paid tuition, just not by the student directly. Since this money predominantly comes from NIH and NSF, I’m not sure how a student could be taxed on this. Shouldn’t this be a problem?

    1. CR says:

      At my institution I do not pay my graduate students’ tuition to the university, I only pay their stipend (some get their stipend paid by being a TA). The tuition is a waiver at my institution (nothing is collected). However, I do know some institutions collect tuition until the student passes their candidacy exam – previous institution was private, so paying that tuition was quite expensive. I don’t know how this will play out in the end, but if it’s not changed will cause a major issue.

  9. Old Timer says:

    I guess the NIH will just have to add Graduate Student Taxes to the overhead it pays out.

    1. Dan Udwary says:

      And now your big grant that would have paid for three grad students pays for two, and that gets reduced to one and one half-time after budget reconciliation. I’m so glad I got out of academia when I did.

  10. SP says:

    A few general debating points:
    – If the people in a number of organizations whose successful operation is threatened by this issue haven’t come up with a solution, I doubt your 2-minute thought of, “Duh, why don’t they just do this, problem solved!” answer is feasible. Sure, they’re self interested in the status quo, but unless you also do this for a living, they’ve given this more thought than you have.
    – To claim, “There have been threats in the past but it’s always worked out” assumes that there will never be a threat that doesn’t work out, or to recognize when violation of certain norms have passed a tipping point. True, it can be alarmist to claim every threat is the Big One, but chances are some day things won’t be OK.
    – If a policy goal is being put forward- in this case, the goal seems to be the weakening of institutions of higher education- do you think there’s really a simple workaround to counter that policy goal? Oh, the NSF and NIH will just provide more money, we’ll just charge the government more overhead when they already want to cut it, we’ll lie to the IRS about the actual value of tuition waivers… I think the weakness in that assumption is obvious.

  11. SteveM says:

    The revenue opportunity loss of the current grad student system is probably less than the cost of 1 month of the taxpayer dollars flushed down the toilet servicing the pathological U.S. military operations in the Middle East.

    When you contact your Congressperson/Senator, bring that up too…

    1. Dan Udwary says:

      I can’t find the source anymore, so I could be mistaken, but I read that the tax revenue from this would bring in something around $2B a year, assuming Universities don’t come up with accounting tricks to help their students (which they certainly will, so it’s certain to bring in much less revenue than was accounted for in deficit scores and such). Meanwhile, we spent >$45B (not counting secret activities) on Iraq, Afghanistan, and Pakistan in 2016. So, yeah, you’re not even a little bit wrong.

      Also, a fun stat: Under the Senate tax plan, Betsy DeVos stands to personally save about $2B in taxes. So, yeah. Really fair and just plan they have going here.

      1. Old Timer says:

        Don’t count on Universities coming up with fancy accounting tricks to help students. Even obvious account methods to help students hasn’t been realized at my institution.

  12. mallam says:

    With all the crazy, ridiculous, and simply wrong claims coming from those in favor of this bill, there is no guarantee that the House proposal for taxing the free tuition on grad students won’t make it into the final version. The vast majority of those in Congress have no fricking concept of what this means to the average person trying to get a graduate degree in science; how many of them actually did it, not MDs but PhDs? So I’m quite critical of your wait and see approach as it’s a bit like the betting Trump would have never become POTUS in July 2016. And so, here we are. I and others have already been sharing the message on this from first learning of this threat to our national scientific education. Many I know have already contacted our representatives in Congress on this matter. Our Republican Senator will not care, as he had a large part of “crafting” the actual bill, once owned a bank, and is only like so many others only is interested in how much he can save in paying taxes. He doesn’t care about this proposal as it hasn’t and never will affect him. It’s important to get to those few who still have a semblance of conscience and respectability to make this right. And if those who “sit and wait” find the House versions wins the debate, then those just sitting and waiting have to look in the mirror and cry in shame.

    1. SP says:

      Congress members with doctorates:
      Senators- 2, 1R 1 D (none in science)
      Representatives- 11, 4 R 7 D (5 in science, 3R 2 D, depending what you count as science)

      1. Torchwood says:

        Scientists don’t make good politicians. Scientists use the plain truth and logic as opposed to alternative truth and logic.

      2. Dana says:

        Couldn’t it also be that a lot of time spent in the ivory towers makes people less keen to listen to constituents? Just saying…

  13. tt says:

    I agree with all the point made by SP above. This should be taken seriously and there is not an obvious work around if passed. The scary thing is really the intent of this provision as it is not about revenue, given the drop in the bucket this represents, rather it is about politics and sending a threat/message to academia. Even if the provision is lost in committee, one should interpret this for what it is and the politics behind it, thereby taking this as a call to political action for those targeted by it.

  14. Peter S. Shenkin says:

    Of course if they increase the stipend to cover the tax burden of the tuition, grad students will have to pay tax on the increased stipend as well.

    As far as the $0-tuition proposal is concerned, what you may be missing is that in grant-supported research, the grant pays the tuition, and this is a major source of income for the University and perhaps even for the department depending on how they do their internal accounting).

    Or at least that was the case when I was in grad school, 1970s.

    Possibly they could make it up by lowering tuition and increasing overhead, but overhead is already very close to 100%; or, again, at least it was back then.

    1. Anon2 says:

      Such high F&A Rates are history: even Harvard, which used to have a rate near 100%, is now down around 70% (according to what they have posted on the web). Stanford is around 55% and UCSF is around 40%.

  15. RB Woodweird says:

    It was Registration Day. Graduate students had to be reminded to walk down Commonwealth Avenue to stand in line and turn in a piece of paper that the Chemistry Office had signed for the tuition waver. Problem was when we all procrastinated as usual and J. came back from the scrum to say that the Registrar told him that Chemistry was out of funds and he could not register. We were of the mind that it was bollocks anyhow as we did not take any classes but slaved in the lab 80 hours a week. A holiday week. G. offered that she had registered early and showed us the form – stamped for fiduciary truth by the Bursar and then signed by the Registrar. We brainstormed this for a minute, then whited out her name and the Registrar signature on her form and copied it several times. An application of our names to the newly-whited field and we were off. Straight to the Registrar, where the copied stamp was accepted as fact and we were all duly enrolled. I never did hear how Chemistry came up with the funds to cover our stunt, in fact, I never heard a peep from anyone about it. I believe that was the beginning of our loss of faith in the Chemistry Department’s competence. Just kidding. We had none to begin with.

  16. Uncle Al says:

    1) STEM graduate students are granted the traditional exemption.
    2) Everybody else gets their pockets picked “for the greater good.” Trump’s election refutes political science, Inner Cities refute social science, prisons refute psychology, about 195 sovereign states refute macroeconomics. Do we need degrees in remedial studies?

    Physical reality is not borromean rings of parasitism burning money for thrust to hover above sludge…though one could (AI, re Quill) write a boffo master’s thesis to the contrary.

  17. Sam Adams says:

    The problem is that the department and the PI pay the tuition to the graduate school/university. And the tuition amount has been massively rising, disproportionate to any other segment in our economy.

    The university doesn’t want to lose that income from the departments/PIs if they were to charge zero tuition in order to avoid the taxation.

    Now, the fact that these universities abuse their non-profit status when it comes to taxes on gains on their endowments, that they overspend on yet another architectural wonder from Frank Ghery, or that they take a massive cut from each grant, is something we will never hear about. Nor will we have an honest debate about the rising tuition.

    I think it’s a stupid part of the current tax plan, especially in light of different types of insane government spending, to be clear, but the universities need to address their greed from within if they should be taken seriously. That debate has been long overdue.

  18. MTK says:

    Just speculating here, but it wouldn’t surprise me if each tuition waiver is treated as a operating loss for the University. That then is used in the calculation and negotiation of the F&A costs for the University with the NIH and other granting agencies.

    Not to mention if they do change the graduate tuition to $0 for certain areas of study how are they going to justify not doing that for other areas of study which do not currently receive tuition waivers?

    In short, the universities are probably not keen on changing graduate tuition to $0.

  19. Glen says:

    Here is an explanation of the current system:
    Will my graduate tuition waiver be counted as income for tax purposes?

    Students should consult with a tax professional to determine if any portion of their tuition waiver is exempt from taxes. All Graduate tuition and fee waivers are taxable unless exempt under the Internal Revenue Code. For MassArt to be in compliance with Internal Revenue Code (IRC) §127, all graduate tuition fee waivers are fully taxable: unless per calendar year (January to December) Graduate tuition fee waivers provided as benefits to eligible employees and graduate assistant (GAs) are excluded from taxable income. If the amount of the fee waiver exceeds $5,250, the excess is deemed income under the IRC and taxed accordingly. Are there individuals who are allowed to exclude their graduate tuition waivers from their income? IRC allows the exemption from taxation of tuition waivers above $5,250 for individuals whose education is job related (§132) or graduate students conducting teaching or research activities (§117).


    It is very hard to argue that tuition waiver is not “income”. Recent years have had lots of emphasis on closing “loopholes” in the tax system, of which the tuition waiver is one.

    That said, removal of the waiver could serve a useful purpose. It would be unusual in the blog comments to have three days pass without complaints of the treatment of grad students. I would suggest that doing away with the waiver would be a step towards clarity in the employment status of graduate students-something that is badly needed.

    As a matter of principle, I don’t like the tax code being used to grant special favors- no matter how noble the goal.

    This situation is a good example of why tax reform is so difficult Each special interest group objects loudly when a favored loophole is closed.

    1. Emjeff says:

      “This situation is a good example of why tax reform is so difficult Each special interest group objects loudly when a favored loophole is closed.”

      Amen. That’s the problem in a nut-shell. Everyone wants federal “gimme’s”, but they also want someone else to pay for it; hence, the $20 trillion deficit. Both parties deserve castigation for this state of affairs – Republicans for proposing tax cuts without off-setting these with actual spending cuts, and Democrats for turning this issue into class warfare, by constantly stating the “rich” don’t pay their fair share. Well, I’m not rich, but I do pretty well, and as it stands now, I work one day a week for Uncle Sam. That is a state of affairs that cannot continue.

      1. a. nonymaus says:

        At that rate, you’re not rich at all then. Accept the fact that you’re working class and vote like it.

      2. Entitled Emjeff says:

        How do you get to work in the morning? Drive on a federally-sponsored road? Do you make drugs for a living? Who buys those medicines? Who pays for fundamental science research that drives innovation? Breathe clean air? Drink clean water? Do you have the right to post your comments on a non-censored internet blog?

        Who’s the entitled one that wants “gimmes”?

        1. Emjeff says:

          Sorry pal, but we can’t keep asking Uncle Sam for more and more with a $20trillion deficit. It is just not sustainable. Yelling at me because I point this out is pointless – if you can’t see that spending more money than we have is the path to ruin, then you don’t know any math at all.

          1. GutDecipher says:

            This bill adds to the defecit so who in the hell are you arguing with?

      3. shar says:

        The US federal deficit is nowhere near $20 trillion dollars. It’s not a typo, since you wrote it twice, so the options are

        1. Your numbers are off by well over an order of magnitude, or
        2. You don’t know about, or don’t care to make, the distinction between deficit and debt.

        In either case I’d humbly suggest you spare this subject your attentions.

        1. Scott says:

          Correct, the US *debt* is $20trillion (picture that as the balance on your credit card). The US budget deficit is about $440billion (how much we’re short of paying off the monthly charges on said credit card). And the US federal budget is a little over $4trillion, so the US is only taking in about $3.5trillion in taxes.

          That’s like having a $200,000 balance on your credit card when you have a $35,000 annual income, and every year your balance goes up another $4,500 not counting the interest.

    2. grad student says:

      I don’t think many would disagree that tuition waivers are part of a larger problem concerning the cost of high education and the status of grad students in the USA.

      However, I would argue that simply shifting the burden onto the students immediately is the most sensible way to fix the problem. It would be a drastic quality-of-life change for most of us, which is the reason protests are so loud.

      Surely there are more intelligent ways to combat the largess in higher ed without handing grad students a large bill and saying “go solve this institutional problem from the bottom up.”

    3. Old Timer says:

      While I agree with some of your points, I don’t think it’s very hard to argue that tuition waiver is not income. They don’t actually get any money, so it’s not income. Another strange point is that you don’t like the tax code being used to grant special favors, but that has been a big part of the tax code for the last 100 years so the government can promote or constrain particular economic activities. That’s why 401(k)s, mortgage deductions, and college loan deductions exist. The government saw pension funds failing, so why not shift the responsibility for retirement savings to financial laypeople?? Somewhere along the line, they decided buying a house or getting an education should be important for people too.

      1. tt says:

        Exactly…the tax code and it’s loopholes are political. Closing one sends a clear policy message. In this case it is “we don’t like higher education and your politics…so chew on this” The tax code is just one giant incentive structure that the government yields as a big stick to either encourage or discourage economic behaviors.

  20. John Wayne says:

    When I first read the word ‘castigation,’ it read as ‘castration.’

    That would get their attention.

  21. Back in the late 70’s early 80’s even graduate students stipends were not treated as taxable income. Just one more step in the erosion of trust and support for academics/intellectuals by the Republican party. Read The Death of Expertise: The Campaign Against Established Knowledge, and Why It Matters by Tom Nichols to learn more about this important topic. I would not count on this issue “going away in committee” as grad students are among the least powerful groups out there because they have no money for lobbyists. Time to mobilize and call your Congress members (especially Republicans) and tell them they won’t have your vote if this is allowed into the final version of the bill.

  22. Ken says:

    unless the House just moves to adopt the Senate bill, which I think is less likely.

    This became infinitely less likely today, when it turned out that the Senate accidentally left in the 20% minimum tax for corporations, while lowering the corporate tax rate to 20%. On the plus side, that immediately renders all corporate tax loopholes irrelevant, since it doesn’t matter whether they take the deduction or not.

  23. Makoto says:

    Another question worth asking is, why is higher education so expensive in the US anyway? In many other countries, tuition is free or effectively so. And not just for the commies in Europe – also in much poorer places like Mexico and Brazil. Surely a rich country like the US could afford to provide free education to all citizens. Extortionate tuition is a social policy decision, not an economic imperative.

    1. Pedro says:

      It may very well be just as expensive in other countries. The cost is merely hidden. I went the MIT as an undergrad when it was 40 k. My family and I paid only 20k year– other people (other students, their parents, the government, etc) paid a different. The money games played with tuition waivers, taxes, grants, scholarships, etc make it difficult to figure out what the real costs are to society

  24. Occam says:

    Derek, when you opened this can of worms, the comments section turned into the usual reactions from the internet. Can we stick to Med Chem?

    I have to admit I don’t have data, but I suspect “interested in Med Chem” does not correlate with political view or who-I-voted-for or who-I-think-should-pay-more-taxes

    1. Derek Lowe says:

      Yeah, happens every time. But this is enough of a chemist- (and scientist-) affecting issue that I thought I’d speak up.

      1. Fit Bot says:

        The issue is relevant, and in my opinion it is nice to have a little political debate w/fireworks to liven up the crowd. Keep injecting these as needed Derek–some of us like them. Those that don’t can wait till tomorrow.

    2. Passerby says:

      Occam: Would you like to be the person who does med chem while Rome burns? When the s*** hits the ceiling it’s ok to speak up. Derek does enough med chem posts to warrant an occasional post of this kind.

  25. steve says:

    So, all those who are so supportive of tuition waver being income, how strong are you on taxing income from stocks, bonds and other investment vehicles? Any reason why the wealthy get tax-free income (capital gains, carried interest, self-incorporation, faux real estate losses, etc., etc.) while graduate students need to pay taxes on education? Why teachers now can’t deduct items they pay out of pocket for their students but any business owner can? The Republican tax package is just a giant giveaway to the rich and reflects the Republican philosophy as so eloquently crystallized by Charles Grassley: ““I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

    1. Emjeff says:

      More class warfare. If 49% of Americans in the lower income brackets pay no income tax at all, how does one lower their tax rates?

      1. MBP says:

        Tax credits (like those for having children, or the Earned Income Tax Credit, which is only available to those who are employed) mean that people who don’t pay any federal income tax at all can get money back at the end of the year.

  26. Blunderbuss says:

    What if graduate students simply didn’t pay or report? Maybe universities could simply not report. There is no way they could go after them all. IRS enforcement has been defunded and the current administration is more interested in the Johnson amendment and cronyism. No change in the law will make the necessary changes required to the administrative state that they are so keen on dismantling. By the time any new IRS rules are implemented the law will be repealed. Why not make an organization to fund a cadre of attorneys to come to the defense of any grad student investigated by the IRS, call it the Grad Student Tax Policy Institute?

    1. Anon says:

      Wait your solution to an extra $5-10k per year in taxes is commit tax fraud?

      Why bring it up now? Why not under report this year’s income by $10k.

      I’m sure no one would notice…

      1. Blunderbuss says:

        I was just pointing out that there is nothing to get concerned about currently. Look at how the implementation of the ACA rules to graduate student health plans has progressed, seven years now and still no resolution. No one has to do anything illegal. Rather that there are many ways to get around an administrative state that the current administration is dismantling. Currently no one knows what any possible law means and how this translates to a burden on the universities and the students. It will take years for them (IRS) to tell us what it means and has they have done with the ACA, they may choose not to enforce it. Any graduate school providing health benefits and graduate student receiving them currently is probably violating the ACA and yet no one is being charged with a crime. If this law passes hand scrawling and all, the universities will put up a good fight during rule making and comment period and probably negotiate a de facto exemption at least temporarily. But more to your point, if everyone is violating a law and it is not enforced it has no meaning.

  27. eyesoars says:

    Wishful thinking aside, this is GOP payback to science and ‘liberal universities’, and is putting the pedal to the metal to make the USA a third world country again, the way it was in the 1800s.

    With this change, it will again be the prerogative of the wealthy to send their children off to the best schools, and the rest of the country can, and will, suffer for it. The GOP is actively hostile to public education, and this is one of the consequences.

    My parents, ‘good Republicans’, deeply believe — to this day — that Reagan lowered taxes on poor people. As a graduate student at the time, whose TA and RA stipends were suddenly taxed as income (unlike scholarships), I did not believe this, but facts are no rebuttal to the beliefs of those who are unwilling to examine reality.

    There seems to be a lot of very active denial here, with plenty of wishful thinking on top.

  28. crni says:

    Tuition and tuition waiver in science graduate school is just a way for universities to pul in more money from grants. I am not sure if it’s even counted into overhead when PIs get grants. So basically, PIs get a grant, univerisy takes the overhead + tuition for the grad students and issues a “waiver” no? Har har. An then Sutendts are supposed to pay tax on it….

  29. rhodium says:

    I suspect taxing graduate student tuition waivers would hit a number of international students hard. Since I was chair of graduate admissions for years I have some experience in this area. Some could come up with the money, many could not. Coupled with a stronger anti-immigrant tone, these policies will make attracting the world’s best students to graduate programs harder. Personally, I want all the very smartest, hardest working people to come to the US. If you cannot compete with someone who learned english in their teens, maybe you are second rate. The way to be the best is to compete with the best.

  30. myma says:

    The graduate school tuition waiver reminds me of free-with-purchase items – you are never really charged for them, but not really not charged for them, so would/should/could one pay sales tax on them?

  31. Wallace Grommet says:

    Remember, the tax bill includes deductions for private aircraft, private education, and other goodies for the moneyed crowd. How about them apples, emjeff, guardian of private property?

  32. JB says:

    Will the Baby Boomers please just get up and leave quietly instead of screwing entire generations after them? Typical Baby Boomers lamenting how ‘lazy’ and ‘soft’ Millennials are, yet they do everything in their power to destroy the opportunities for their children. It must have been nice growing up in an America where housing and rental prices were 5x cheaper, you could get decent jobs with pensions, healthcare, and enough salary to raise a family on with just a high school degree, and college tuition cost 10x less. But before they go, Boomers elect Trump who wants to drastically limit our opportunity for higher education and who wants to give tax cuts for golf course owners. The real cherry on top is also starting a nuclear war with North Korea via Twitter. Just go into the sunset already…

  33. ex student says:

    What makes a ‘student’ a student?

    To me, a student is someone who:

    – attends lectures full time.
    – does experiments under close supervision.
    These experiments are predefined lab exercises that follow an existing recipe or textbook. During the experiment, staff is present to help and guide the experiment.
    – Also, normal students are relatively young, typically in their early twenties

    A graduate ‘student’, on the other hand:
    – works independently.
    I, as an industrial worker, have closer supervision than I had as a grad ‘student’. The work of a grad ‘student’ is not supervised more closely than the work of any worker in the industry.
    – teaches or runs labs supervising real students, i.e. he acts as regular university staff
    – Grad ‘students’ are older, well beyond the age of normal students. Normal non-academic people wonder why anyone at that age is still studying.

    Let’s face the harsh reality: Grad ‘students’ are not students.
    They are research staff, and should be treated as such (regular employment contracts, benefits, social security etc.).

    The tuition waiver is a scam perpetrated by the university in order to get cheap labor.

    It is also tax evasion.
    I have a side business selling shiny but worthless certificates to decorate your office with. If I waive the fee for the certificate in return for you mowing my lawn, you’ll have to declare the value of the certificate as income, and I’ll probably have to do some explaining to do as well.

    While I am sure that the change will have negative consequences in the near term, any change that reduces the exploitation of young people under the guise of education will be welcomed by me.

    Of course, ‘students’ will protest. If they grasped how universities are exploiting them, they wouldn’t be there in the first place.

  34. Arnob Endry says:

    I’m with Derek on the “wait and see” here, the number of times the sky has fallen on some tax bill provision seems somewhat small, and given the narrative optics I put the likelihood of passage somewhat low. The “postdocs deserve overtime” of a couple of years ago never came to pass, either.

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