The House passed the tax reform bill on November 17th, 2017.
Repealing the popular Student Debt Interest Deduction - on top of counting tuition waivers as taxable income - would make it enormously more hard for our students, especially those from low- to middle-income families or underrepresented minority groups, to repay the loans needed to seek and earn a master's or doctoral degree. "We don't see that money at all, and the impact of that being calculated as income would mean that our already-modest stipends will be reduced to such a point that we won't be able to live from it".
Demonstrators at UC Berkeley took to Sproul Plaza on Wednesday to protest the House Republicans' tax bill, in light of how it would impact graduate students.
Currently, several Masters and Ph.D. students' tuition is covered, and that money is not taxed as long as the student does research or teaches for the university.
It's not the norm for PhD students to pay any tuition. The students said if it passes, the new tax law will make it too expensive for them to continue their education.
Graduate Students and supporters gather on the Pentacrest.
The GOP has said the tax plan will lower taxes for the majority of Americas and reduce the burden on those in the middle-class. The House bill would also eliminate a deduction for student loans and tax-exempt bond options for private universities.
University spokesperson Stephen McCarthy wrote in an emailed statement that Penn is "actively working" to address the concerns of graduate students.
Regardless of how universities would choose to restructure graduate aid, the House proposal goes a long way toward including most nonwage compensation as taxable income, which would work toward creating a more encompassing definition of income that does not favor one type of compensation or consumption over another.
Though the "qualified tuition reduction" provision is not now in the bill before the Senate, it could still end up there, according to some political analysts. The next day, she told The Spokesman-Review that while she supported the House plan overall, she didn't support counting tuition waivers as taxable income.
Students announced at the end of the meeting that they would join a national graduate student walkout on Wednesday at noon to raise awareness for their opposition of the bill.
The House version of the bill if it becomes law would also eliminate the tax deduction for student loan interest payments, and tax the value of tuition benefits now offered by the universities to faculty and staff and their spouses and children.
That's evident in the massive subsidization of higher education, which taxpayers support in various ways to the tune of more than $250 billion annually, when student loans, grants, and tax credits and deductions are accounted for.
Student Fiona Ruddy took the microphone and urged everyone to "make sure you call, tweet and shame your representatives - especially if you're from MI and purple states".
These aspects of the current federal tax code make it possible for more people with talent and a strong work ethic to earn a college or advanced degree. Many graduate workers would have to withdraw from their programs because their tax obligations would increase by as much as 400 percent while their stipend would remain the same.
Sumpter stated that this "would make higher education less accessible". Throughout the past century, higher education has served as a key driver of social mobility and economic growth in American society. That's small potatoes considering what's at stake, said David Schwartz, a psychology professor at the University of Southern California. In other words, these graduate students are receiving a significant financial benefit (sometimes worth upwards of $50,000) that is contingent on employment.
"We're an easy target", Brookins says.
The Ohio State Tuition Guarantee freezes tuition, fees, and room and board for incoming first-year students for four years.
Speakers at the rally predicted the House bill would triple or quadruple the amount of tax paid by the typical graduate student worker. "The idea that we would discourage undergraduates from pursuing higher education when it's a net benefit to universities and the USA - it seems very weird".
After this week's vote, the two plans will be reconciled into a single bill.
Graduate students are anxious because this is something that will definitely impact their personal finances.