On Nov. 2, House Republicans proposed a 400-page tax reform plan that included new standards for student-employees in graduate school. The plan would lead to many graduate students falling further into debt, and perhaps dissuade those hoping to attend graduate school due to the new possible expenses.
Currently, those who work while attending college get a break on tuition, and it is not counted as a taxable income. For example, the income that graduate students receive for working as teaching assistants can count towards their tuition and it won’t be taxed. Contradicting this current policy, the bill suggests that tuition waivers be categorized as income, thus allowing the possibility to be taxed. Therefore, students could be paying taxes that cost them a lot more money than they receive in their paychecks from their on-campus job.
According to The Chronicle of Higher Education, about 87 percent of graduate students receive an income of $50,000 or less. Students seeking master’s degrees had tuition waivers reaching an average of $11,000, and students seeking doctorates received waivers around $13,600. The GOP’s new policy would increase many graduate students’ federal income-tax burden. This would mean that one’s federal taxes could increase by 63 percent, leaving those already in great debt in more of a financial mess.
The new tax plan should eliminate this feature, because less students will be inclined to pursue graduate school if it remains and is voted into law. The government, and society as a whole, should encourage students to attend institutions of higher education, like graduate school. If less people receive their Master’s and Ph.D.’s, society will become much less educated. Many prestigious careers needed for society to function could not exist without people attending graduate school. This level of education is required for dentists, lawyers, financial managers, nurses, surgeons, psychologists – the list could go on. Not everyone is fortunate enough to be able to pay for graduate school, which is why it is so important to recognize that the current policies limiting federal-taxes for students enable such people who struggle financially to receive advanced degrees.
Not surprisingly, the new tax plan favors large corporations. According to the Chicago Tribune, their tax rates would decrease from 35 to 20 percent, while small businesses would adopt a tax rate of 25 percent. This tax plan clearly does not take into account those who deserve a bigger break. The fact that graduate students, many of whom still have to worry about paying off their undergraduate loans, would be forced into paying more federal taxes demonstrates that this plan does not favor the betterment of humanity. Many Democrats openly oppose the plan, as well as some Republicans.
The House hopes to pass the bill along to President Donald Trump by Christmas. Hopefully there are changes regarding taxes for graduate students before that time.