The Republican tax bill saves grad students’ tuition benefits

The final draft of the Republican tax bill kills a proposed tax on tuition waivers. It is a big win for grad and PhD students, and higher ed advocates who opposed the measure.

House Republicans’ tax bill included a provision that would count tuition waived by universities as taxable income, meaning that graduate students could be on the hook for thousands of dollars more in taxes each year.

Approximately 145,000 graduate students could have been affected by the measure, about 60 percent of them from STEM (science, technology, engineering, and math) fields, according a Department of Education survey from 2011 to 2012, the most recent data available. It’s hard to say the precise tax hike for each person, but experts suggested students could have owed an additional $2,000 per year or more — an amount that adds up for graduate and PhD students who usually take multiple years to complete their studies.

Graduate and PhD students protested the measure fiercely. Student groups held rallies and info sessions on campus, blasted the bill on social media, mailed postcards and letters to lawmakers, and hounded Capitol Hill offices with phone calls. And on November 29, students organized a walkout at about 60 universities to protest the measure.

At Ohio State University, about 100 graduate students held a “grade-in” at the student union. At the University of Maryland College Park, they put on garbage bags adorned with messages like, “This bill is trash.”

Even Republicans who originally voted for the House version of the bill took issue with the tax on tuition wavers. Rep. Pete Sessions (R-TX) led the push, writing a letter to House and Senate leaders urging them to keep tuition waivers tax-free. About 30 other GOP House members signed on.

“It became a bipartisan issue,” Jenna Freudenburg, a fourth-year astronomy student at Ohio State, told Vox. “And I think getting to that point was in large part a result of the huge backlash that we saw from graduate students across the country. I think people realized pretty quickly, once we started paying attention and reacting to it, it was not something that that made sense on any level.”

René Herrera, a graduate student and research assistant at the University of South Florida, joined campaign to mail postcards to lawmakers. He estimated his taxes would spike from $235 per year to $3,000 under the original GOP House plan. He called his representative, Dennis Ross (R-FL); when he told the person who answered the phone, they, too, were shocked at the increase.

“I think the sentiment was that if this was passed, people would drop out,” said Cara Snyder, a women’s studies PhD student at the University of Maryland who helped organize some of the protests on campus. “I already live on $19,000 — which in the DC area is impossible. I can only do this because I live with other people, have extra jobs. We’re really already scrambling to make a living.”

Steven Bloom of the American Council on Education said that the Senate’s version of the bill didn’t include this provision, which made it a bit less likely it would appear in the final version.

But he also credits student activism for pushing lawmakers to rethink the tax. “I suspect that a lot of it is they heard from graduate students in their districts, and they understood that this is really important in terms of ensuring that we graduate a number of really bright young people, that we continue to expand the pipeline of these students, particularly in the STEM fields.”

That pressure helped, but so did the math. The tax on tuition waivers “didn’t raise that much money to begin with,” Bloom explained. “It’s a lot of money for you or me individually, but not in the context of a big, multitrillion-dollar bill.”

“It’s not an enormous pay-for,” he added, “so it’s not like making the change cost them a lot.”

Still, graduate students such as Freudenburg see their advocacy as incomplete. “We saved our tuition waivers, we’ll be able to pay rent next year, so that’s great,” she said. But she said she is disappointed that other provisions, such as a tax on endowments at some universities, stayed in the final version.

“That’s getting lost a little bit,” Freudenburg said. “It’s easy to see the immediate effects that this tuition waiver tax would have had on us. It’s a little less obvious the effect that these other changes will have — but I think systemically they’re going to do a lot of harm.”