On Thursday November 16, the House passed a bill on tax reform. Included in the bill are reforms to financial assistance given to graduate students. What’s left is for the Senate to pass their bill and to reconcile the differences between their version and the one passed by the House.
Although it is too early to tell what the tax plan would look like in its final form, we can speculate on what the House bill, in its current form, would mean for education.Currently, grad students can receive tuition waivers to work in a research lab. This type of aid is the norm for people in STEM fields, according to Dan Krane, professor of biological sciences. What this means is that a university does not charge tuition while a student completes their assistantships.Under the house bill, grad students would have to pay income tax on their tuition waivers. This comes down to students paying thousands of dollars in taxes.
Also included in the bill are taxes levied against private institutions with large endowments, and taxes on the merchandising that institutions do, according to Krane.The original White House budget proposal called for a roughly 13.5 percent cut to education, which would affect K-12 as well as higher education, according to an NPR report.
It also called for a stop to student loan subsidies, which could add thousands of dollars more to the costs of college. Another change would be a phasing out of the public service loan forgiveness program, and a simplification of student loan repayment options, down to just one repayment plan.In the long-term, colleges receiving lower government funding could mean higher tuition rates, which would make it more difficult for students to afford college, according to Hee Yong Shin, assistant professor of economics.
Melody Tankersley, senior associate provost and dean of graduate studies of Kent State University, recently submitted a letter to Senator Sherrod Brown regarding tax reform. The elimination of Section 117(d) of the bill would create an annual tax increase of $1,425 in taxes, according to Tankersley in her letter.
“If the bill passes, obtaining a graduate degree in the United States could become financially impossible for many individuals,” she wrote. “[The] repeal… would forcibly prohibit an entire generation of new researchers and educators from entering graduate studies.”
The right way to go would be to increase the budget for education, increase subsidies for colleges, and to lower the tuition, according to Shin.
“The budget proposal, at least in its broadest direction, if implemented would be a disaster,” he said.
