On. Nov. 16, both the House of Representatives and Senate Finance Committee passed the GOP tax plan. Should the bill pass at its current state, however, one of the groups negatively impacted would be graduate students who receive tuition waivers.
Section 117 of the U.S. tax code currently exempts tuition waivers from being considered towards income for tax purposes. Under the proposed plan, Section 117 of the U.S. tax code would be eliminated, adding tuition waivers and stipends to graduate students’ gross income for tax calculations.
According to Alyssa Dobson, director of financial aid and scholarships, 128 graduate students at SRU received tuition waivers during the 2016-2017 academic year, most of whom were full-time students. Most of the waivers were also accompanied by a stipend for work compensation. Under the proposed tax plan, the waiver and stipend would both be added to taxable income.
“The view of anybody who values higher education is that it’s going to have a stifling or chilling effect on graduate programs and graduate students. We would hope that it wouldn’t limit access, but essentially, a student that has to consider to the tax impact, and it devalues the benefit of receiving the tuition waiver because it adds the added responsibly of then including that in your taxable income,” Dobson said.
Tuition waivers at SRU are based on enrollment, so a graduate student enrolled in more credits would receive a greater tuition waiver. If the bill were to pass, graduate students may wish to reduce their credit load, which will also reduce the tuition waiver. This means it would take graduate students longer to complete their program.
If the proposed plan were to take effect, students may find additional financial support through scholarships and loans; however, according to Dobson, there are fewer scholarships for graduate students.
“If a student, a family, any stakeholder is concerned, they do need to reach out locally to either their representative, their senator. Anyone who has a hand in this process also has the power to change it,” Dobson said. “If they don’t hear from us, they’re not going to know that we’re concerned.”