The House tax reform bill will make graduate school unattainable

Michelle Fredrickson and Mikaela Rodenbaugh

Editor’s Note: All opinion section content reflects the views of the individual author only and does not represent a stance taken by the Collegian or its editorial board.

The newest tax plan approved by the House of Representatives could have a terrible effect: destroying the accessibility of graduate school. Over the recent break, the CSU Graduate School sent an email to students detailing these issues.

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Although the Republicans claim that lowering taxes is a priority, the tax bill passed in the House does the opposite, taxing grad students for income they never see.

Changing what’s considered taxable income:

Graduate students often receive a tuition waiver in exchange for teaching classes and conducting research. In addition, they receive a small stipend in order to pay for living expenses, because universities recognize that the research these students do is too intense to allow them to hold another job. 

This is a fair system because graduate students contribute to the universities by advancing scientific research and teaching undergraduates. Graduates perform a great deal of academic heavy lifting, to the financial benefit of their universities. Even with assistance, many low-income graduates have a hard time making ends meet, often needing loans, family assistance or outside jobs even after receiving a stipend and tuition waivers.

The GOP bill approved by the House would require graduate students to pay taxes on their tuition remission. This would gouge graduate stipends by as much as 50 percent and could make graduate school unaffordable to all but the wealthiest students.

In the current system, the tuition waiver is tax-exempt, meaning it is not considered a part of the student’s taxable income. The GOP bill approved by the House would remove that protection and require graduate students to pay taxes on their tuition remission. This would gouge graduate stipends by as much as 50 percent and could make graduate school unaffordable to all but the wealthiest students.

CSU estimates that a non-resident graduate student’s tuition amounts to nearly $27,000 a year. This tuition is waived and the graduate students are given a sliding scale stipend depending on department funding and whether they work full-time. As an example, in the journalism department, a full-time graduate stipend is about $13,500 a year. Health insurance is deducted from this number and all stipends are considered taxable, meaning that the total is actually closer to $12,000 a year.

This stipend is taxable income, while the $27,000 tuition waiver is not. Under the new bill, the tuition waiver would be taxed. This could have devastating effects on students in Colorado, especially as the cost of living skyrockets.

The already hefty price tag of a graduate degree:

Attending graduate school is a financial burden for most students, as the stipend is often not sufficient to cover both housing and food, while housing and textbook costs continue to rise, not including the baseline cost of attendance.

CSU estimates that off-campus rent will cost graduate students more than $10,000 annually, with textbooks, transportation, and other fees costing another $7,000. So, for a CSU journalism graduate student, the estimated costs for just these basic necessities, not including food and personal products, exceed their salary by about $5,000. Additionally, student fees are not covered by any assistance made available to graduate students, typically around $800 per semester for full-time graduate students.

Even without the tax reforms proposed in the House bill, graduate students are strapped, stressed and falling into debt. Making the tuition waiver taxable would deduct from an already small stipend and push graduate education even further out of reach. More students will have to take loans.

Student loans are the only form of debt that is not forgivable under any circumstances. Neither bankruptcy or even death provides an escape from student loans. Unpaid loan debt will transfer to the deceased’s family, should the person die before paying them off.

Student loans are the only form of debt that is not forgivable under any circumstances. Neither bankruptcy or even death provides an escape from student loans. Unpaid loan debt will transfer to the deceased’s family, should the person die before paying them off. It is unreasonable to subject students and their families to this paralyzing debt. Instead of addressing this growing problem for Americans in their tax reform bills, Republicans are pushing legislation that worsens these problems and further adds to our epidemic levels of national student debt.

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This is incredibly hypocritical coming from a party who relies on a platform to reduce taxes. The fact that the tax bill is advertised as reducing the burden of taxes on the American people, yet somehow manages to make taxes higher for several segments of the population—not just grad students—is despicable.

Changing the face of research and perpetuating elitism in higher education:

The tax bill approved by the House is nothing more than a scam to keep the extremely wealthy coffers overflowing and stop middle and lower class Americans from being able to pursue their dreams. Moreover, these cuts to those pursuing graduate degrees will have lasting effects on the scientific community, making research harder to complete and ensuring researchers are less representative of the population. If Republicans are truly concerned about elitism in higher education, with this legislation, they are writing a self-fulfilling prophecy.

Diversity among American graduate students is already a problem; while international students often have support from their home country, students from within the United States may have no other funding help. This leads to the average American graduate student being a very specific type of person: white, female and upper-class; not a reflection of the average American. This lack of diversity among American students is something that will be compounded by the new tax plan and could lead to a narrowed perspective for those answering the research questions of our time.

Navigating the decision to drop out or take on loans

Facebook post: "If the GOP tax plan goes through me and many of my collegaures would not be able to afford going to graduate school any longer. Through my department my tuition is waived and I am paid a small stipend in exchange for teaching undergraduate classes. We live off of a small amount of income in order to pursue our masters and PhDs, but this tax plan would tax us more than some of the wealthiest income brackets in the country.

Austin, a graduate student at the Ohio State University is among the impacted students. 

“If the GOP tax plan goes through, me and many of my colleagues would not be able to afford to go to graduate school any longer,” Austin wrote in a Facebook post. 

Her family does not assist her financially.  If this bill passes, her tuition stipend will be slashed. She won’t be able to afford the costs of school, fees, books, rent and food. Her only option will be to leave graduate school.

Austin is a student in Ohio, but this is an issue that impacts graduate students nationwide, including both of the authors of this column.

Mikaela might drop out of school:

As a graduate student pursuing a Masters of Science in Public Communication and Technology, if this tax reform is passed, I may face dropping out of school.  

I graduated with very little family support with my undergraduate degree in Journalism and Media Communications and decided to pursue my graduate education with the understanding that I would finally have the assistance I needed to get through school without the same financial insecurity.

During my time as an undergraduate, I experienced a lot of financial hardship. I funded my degree exclusively through scholarships, grants and personal income from jobs. At the same time I was working and going to school full-time, I was also paying for my living expenses.

A large part of my decision to attend graduate school was the tuition assistance and small stipend available.

Under these tax reforms, I would likely need to drop out as the government would consider my taxable income to be almost $30,000 a year, making me accountable for thousands of dollars in taxes (nearly half of what I receive in actual spendable income).

Throughout my time as an undergraduate, I sometimes worked three jobs to stay afloat and almost dropped out. Now, I feel like I am reliving this painful experience. Watching the proceedings of this tax reform bill has gutted me, and left me feeling as though a rug was pulled from underneath my feet.

The House has already passed this bill, and the Senate is considering a version that does not have the same ramifications for graduate students. They will have to reconcile between the two bills, should the Senate bill pass.

I am waiting with baited breath, hoping that Americans will see that this is the wrong choice for our students.

Michelle would be surrounded by people just like her:

My experience differs from Mikaela’s, as I am in a professional program – a master’s in public health (MPH). Professional degrees like an MPH, an MD and a DVM rarely receive tuition stipends.

I don’t have a tuition stipend helping me through my MPH, so I would not see a tax increase because I already pay full tuition. I am fortunate to have a supportive family helping me get through. I also work as close to full-time as I can in order to make ends meet myself, but I recognize that I have an enormous amount of privilege.

This tax bill would limit graduate school attendance across all fields to people like me—largely white, upper-middle-class Americans from fairly affluent backgrounds.

Nobody benefits from that. Some of the most valuable perspectives I’ve gained in my studies are from people of drastically different backgrounds. We need diversity or the way we see the world will become skewed.

I don’t need to be directly impacted by this bill to realize how wrong it is—my good friend Austin, mentioned above, and I applied to all our graduate schools together. She is going to make a fantastic professor someday, and I would not be content to see the GOP take that opportunity away from her.

This is a bill that has far-reaching consequences, even for people with families in a position to fiscally support them. Maybe I could survive this cut, but that will not stop me from fighting for those who wouldn’t.

Opinion columnist Michelle Fredrickson and Digital Production Manager Mikaela Rodenbaugh can be reached at letters@collegian.com.