Since learning about the US House of Representatives proposal to tax tuition benefits as earned income, I have been worried about graduate students. And I’m not alone.
Taxing tuition benefits is one of the most profound ways I can think to disincentivize smart, ambitious, motivated students from pursuing graduate study. Amanda Grannas, Associate Vice Provost for Research at Villanova University, calls this a “death blow to graduate education.”
I predict this policy will have long term consequences for our nation in terms of future scientists, engineers, nurses, educators, historians, to name a few. The proposed tax policy will result in a missing generation of research and development; a missing generation of social, scientific, and economic advancement.
When the House-led GOP bill passed, I immediately printed two 1040EZs and began filling them out under the current and the newly passed House tax proposal. On the face of it, the new tax brackets may appear a boon to graduate students. For those graduate students attending the few state institutions that have maintained tuition at a relatively low cost ($4500-7000 annually), their marginal income will be taxed at 12% rather than 15%. But then we must remember that graduate students’ taxable income may double (and in some cases triple) AND the students will not have seen one cent of that income for even one minute. For a student earning $20,000 as a graduate assistant and $40,000 in tuition benefits, their income will be taxed at $60,000. Quite simply, this is more “earned income” that yields far less “take home” pay.
Using the University of Washington as a case study, this graphic from the Council of Graduate Schools Tax Reform Resource website tells the story.
Soon after the Senate Tax Bill passed in the hours of Saturday, I began receiving questions from graduate students who I employ. They wanted to know how this will affect them directly and what they can do.
This pressed me in new ways as a leader. Although I know how to help students deal with interpersonal conflicts and feel comfortable discussing the benefits of major and career exploration, I have far less training in supporting students to navigate and advocate on issues concerning politics-saturated public policy. And let’s be honest, this is political. The GOP-led House and GOP-led Senate bill passed without a single Democrat voting for the measures.
I looked to my Twitter feed (@TriciaSeifert) for advice and counsel. During the #COLLEGESTRIKE that left nearly half a million college students in Ontario, Canada out of class for over five weeks this fall, I persistently asked how folks were supporting students during this difficult time. I figured I could draw from their lessons learned to guide me. One of the most important pieces of advice was to communicate with students openly and transparently in as many forums as possible.
So that’s what I did.
Open and transparent communication with students is not rocket science. This tip isn’t novel but is often easier said than done. I took the call to action to heart and responded. First, I got on social media and posted to our graduate club on Facebook:
“I think it may be of value for a group of graduate students to work together in preparing their tax documents under the 2016 tax plan and how these change under the new tax plan. Gathering folks together to work on this might be an opportunity for DEGS [Department of Education Graduate Student group].
The House and Senate bills have yet to be reconciled. It may be useful for our state’s elected officials (Rep. Greg Gianforte, Senator Jon Tester, and Senator Steve Daines) to know the implications of the new tax plan on actual tax filings of graduate students who are their constituents.”
Yesterday was my weekly email communication that goes to all departmental students, staff, and faculty. This is what I shared.
Policy Update: Opportunities for civic engagement – VERY TIME SENSITIVE!
Part of being an educator and professional is to be aware and engaged with public policy relevant to your work and daily practice. This section of the Monday Minutes is designed to share public policy and legislation that pertains to our work as educators.
From a National perspective:
The US Senate passed a separate version of the Tax Bill this past Saturday morning. It differs from the House bill in that it does not tax tuition benefits. Like the House bill, it eliminates the ability for people to deduct student loan interest. You can learn more about how the bills compare here.
The two bills now begin the process of reconciliation through committee. At this point, it is unclear which portions of which bill will make the final tax proposal that will be voted on in an “up or down” vote by Congress. What we do know is that Congress will likely act quickly in advancing a tax bill to President Trump for signature.
Few students will not be impacted by the higher education-related provisions in the proposed tax bill. I invite you to share your support or opposition with our Congressional delegation. You can reach the Montana delegation at:
Senator Jon Tester: https://www.tester.senate.gov/contact/
Senator Steve Daines: https://www.daines.senate.gov/connect/email-steve
Representative Greg Gianforte: https://gianforte.house.gov/contact
Or if you are from a state other than Montana, please look up your Congressional representatives at:
My goal was not to tell students what to think or how to respond but rather provide information from a news source that included hyperlinks to the text of both bills. Please feel free to copy/paste and edit in sharing with your students and colleagues.
I believe it is important for academic leaders to focus our efforts on inviting people to engage as concerned citizens. Civic engagement is what distinguishes a democracy from an autocracy.
Open, transparent, and timely – that was my communication. It was from a desire to make public policy known. However, for knowledge to truly be power, it must also spur action. Now is the time to act!
Contact your elected leaders today . . . and tomorrow . . . and the next day. Share your position on matters influencing your country. Canvass for those running for political office whose positions you support. Run for elected office. VOTE! #MakeYourVoiceHeard
Authored by @TriciaSeifert, PI of the Supporting Student Success research project.