As recently as Thursday of last week, two different versions of a tax reform bill were working their way through a reconciliation committee comprised of House Representatives and Senators. The House version of the tax reform bill had called for changes to the tax code that would have dramatically affected the personal finances of graduate students in the United States. On Friday, Congress released their reconciled version, which removed this change and will likely be voted on today. This cycle of sequential bill releases by both branches of Congress, their subsequent votes, reconciliation, and final vote before passage is a common political process on Capitol Hill. But, how does this political process relate to graduate education and the scientific process more broadly?
Graduate students are employees of the university as well as students, which introduces a conundrum over what counts as income. In exchange for working as teaching assistants in classrooms or as research assistants for professors, graduate students receive a moderate stipend (at IU, anywhere from $15,000-$26,000/year), plus a tuition waiver. The tuition waiver covers (some of) the cost of attending school. The tuition waiver itself has a monetary value of approximately $22,000/year at IU, which is a public institution, but this value can be even higher at private universities ($50,000-$60,000).
This waiver is not money that reaches graduate students’ bank accounts. Rather, it simply means that graduate students do not pay the full cost of tuition for the courses they take as part of a “benefits package” provided by their employer (i.e., the university). The former House version of the bill would have required graduate students to report this “tuition forgiveness” as part of their income, then pay taxes on both their actual income plus the tuition waiver. The result would have pushed graduate students into a higher tax bracket, increased their income tax by 10 to 20% (upwards of $3000), and required them to pay taxes on income they’d effectively never seen.
The potential for that House version of the tax bill to alter the landscape of the graduate student body at IU and other universities was profound. In fact, numerous scientific organizations spoke out in response to this bill (see the full list here), as well as IU’s President Michael McRobbie, and the American Council on Education. These organizations successfully lobbied on behalf of graduate students at IU and across the US and, thus, the unpopular graduate tuition reform section was dropped from the consensus bill.
Now, with only approximately 150,000 graduate students in the US, it may seem unfair to devote so many resources and lobbying power to favor such a small group of citizens. However, the potential of those graduate student tax increases to ripple across the fabric of higher education in the US should not be understated. Notably, it could have discouraged many students from ever even entering graduate school. Potential applicants who support their own children, especially single mothers, would have struggled to make ends meet with such reduced incomes, as well as women in general whose savings have already been reduced by the gender wage gap. Similarly, the tax burden would have fallen disproportionately on potential applicants who already have large student loans from their undergraduate education or who came from socio-economically disadvantaged families. Furthermore, because of racial disparities in financial stability, hiring, and education, the added expense incurred by higher taxes could have made it even more difficult for students of color to continue into graduate study and to access job opportunities like professorship, research science positions, or government research.
But it is not only less privileged students who would have suffered. These barriers to entry could also have impaired the productivity and innovation of the sciences and the scientific process as a whole. Over a hundred thousand of the graduate students in US STEM programs are research assistants, meaning that graduate students make up a large portion of the scientific workforce – a workforce that, under the House’s legislation, would have been limited without any justification.
In addition, the bill could have reduced diversity in scientific fields, despite the fact that diversity can improve problem-solving and peer-to-peer criticism in the sciences. Less diverse communities often lack important perspectives for understanding the limitations and oversights of dominant theories and approaches. For instance, when more women entered into the field of primatology, it helped to balance research on male-dominance hierarchies with research on relations among female primates, such as Sarah Blaffer Hrdy’s work on the evolution of female sexuality and sociality. Similarly, the work of Black feminists, such as Patricia Hill Collins, has transformed the way social scientists understand the interrelations between race, gender, and class, undermining sociology’s prior but persistent pathological characterizations of Black families. These transformative criticisms, which improved our knowledge of the natural and social world, were made possible by a more diverse set of scientists.
Legislation that artificially limits the ability of bright individuals to enter graduate school unjustly falls on the backs of students who are already struggling. In an era where governmental support for science funding is waning, our knowledge of the natural and human has perhaps never been more important. In a similar manner, improved knowledge of the political process can help us to better understand its connection to and impact on the scientific process.
Edited by Rachel Skipper and Josey Topolski
I am appalled at the failure of the “best and brightest” of our academic community it’s to rile about this issue without considering the entire spectrum of data. The data must include the expected behavior of the Universities.
If the “grad tuition waver tax” passes the universities will protect their source of low cost labor by “grossing-up” the cash stipend paid to the student, withholding the tax, and recovering the increased labor cost through grants.
Nothing will change. Your hysteria is comical.
Hey Ted,
Thanks for your thoughts. I agree that some universities would try to work around the tax, not only to “protect their source of low cost labor” but also to avoid unduly burdening their students. Like we said in the article, as students and employee, graduate students find themselves in a gray area, as does the university in its treatment of them as both laborers/providers and consumers of education. I would, however, disagree that we’ve reacted “hysterically” to the proposals. While workarounds, such as the one you suggest, are possible, they are unlikely to be rolled out at all schools, and they are even less likely to provide a full recovery of the losses to students. Accordingly, the reforms would still impact students, though maybe less than we expected. For these reasons, I think ignoring the proposed reforms tends more toward undue optimism.
Chris