House has tax blow for grad students
Emma Lagan hates to think about what would happen should she need a new tire for her car, or worse, a new computer if hers were to crash.
The second-year graduate student in anthropology at Ohio State University said she has just enough from her student stipend each month to cover her basic expenses such as rent, food and insurance.
Lagan was one of about 150 students who gathered at Ohio State on Monday afternoon to protest proposed tax reforms that they say will hurt graduate education.
“I don’t need to be rich,” Lagan said. “I just need to make enough money to live comfortably.”
The House tax-reform plan, which is headed to the House floor for a vote later this week, would repeal a provision in the existing tax code that excluded qualified tuition reductions from an employee’s taxable income. That means those tuition-reduction dollars provided by universities to their employees would now count toward an employee’s income and would be taxed.
That applies to graduate students who receive tuition waivers and often teach or perform research at universities and colleges. The tuition that their school or department covers — sometimes tens of thousands of dollars — would count toward the students’ taxable income, setting off alarms among graduate students.
“I never see that money,” Lagan said. “It is not part of my income.”
Taxing tuition waivers is one of a number of provisions that worry leaders and students in higher education.
Counting those tuition waivers as taxable income would be devastating, graduate students said at Monday’s gathering. Many who addressed the crowd said they would have to consider leaving their programs if the tax plan becomes law.
“The provision that would tax my tuition support would drastically increase my taxes,” said Jenna Freudenburg, a fourth-year graduate student in astronomy. “I would be unable to really afford to be in the program that I’m in. That’s true for a lot of my peers as well.”
As students wrapped up their protest Monday, Ohio State President Dr. Michael V. Drake released a letter from his office to Ohio’s congressional delegation expressing concern about provisions of the tax bill. At Ohio State, more than 4,300 students receive nontaxable tuition waivers, the letter said.
“Without this provision in place, these students will be subject to a major tax increase, making it difficult for universities to recruit them and thus hindering our research and innovation mission,” Drake wrote.
The Senate’s version of tax-reform legislation would not tax tuition waivers. Students at Monday’s rally acknowledged that the House bill could die in the Senate, but they said they aren’t willing to take that risk.
“We are going to kill this bill,” said Alex Davis, a fifth-year doctoral candidate in physics.