Write your member of Congress today and tell them that making graduate tuition waivers count as part of taxable income will spell doom for higher education in STEM in the US and threaten the US STEM workforce.
Dear Congressman X:
As a researcher making breakthroughs in STEM, a professor who trains the next generation STEM workforce, and your constituent, I urge you to reject the provisions in the Tax Cuts and Jobs Act (H.R.1) that increase the financial burden of higher education for graduate students. Advanced degree-holders are essential to the nation’s innovation ecosystem and economic growth. This bill makes it more financially difficult to obtain those degrees and disincentivizes education.
The bill takes away the current provision that allows graduate research and teaching assistants to only pay taxes on the wages they receive and not the tuition waived for them by their university. Being accepted into graduate school and holding one of these positions is a milestone accomplishment, and a university rewards this success by covering tuition. The bill would unfairly penalize that success by taxing this scholarship.
As a concrete example of this, a typical graduate student at local Texas research universities is provided a $20,000 per year stipend, and tuition is covered by a scholarship from the institution. $20,000 per year is barely enough to rent an apartment, buy food, and provide transportation to work. This has been the taxable income, and it puts graduate students in such a low-income tax bracket that they pay very little tax, which helps stretch their stipend for living expenses. However, treating the tuition scholarship as taxable income will at least double their reported taxable income; this then puts them in a higher tax bracket, increases substantially their tax burden, and makes their ability to afford living expenses weaker than the minimum standard of living. Students will not choose graduate programs in STEM as a result, increasing the shortage of US STEM experts. That threatens our economy and our global leadership, as well as the health of American citizens who depend on STEM experts to help drive down the cost of healthcare.
Advanced degree-holders go on to careers in industry, national labs, and academia where they help ensure America’s global leadership and strengthen our national security. I urge you to support the U.S.’s future workforce and reject these provisions.