“While I certainly understand the need for tax reform, we are very concerned about the negative side effects of the House Tax Cuts and Jobs Act on our graduate students, who would suffer an undue burden”, Fuchs wrote in an email. In exchange for their work as teachers and researchers, graduate students have their tuition (ranging roughly between $40,000 and $50,000 a year) waived by their universities. Repealing Section 117 (d)(5) would effectively treat tuition waivers as taxable income, even though no money in these waivers is ever pocketed by students.
“You may or may not experience what the House bill’s tax overhaul will do with respect to tuition remuneration, however, many of your classes are taught, and if not taught, facilitated or improved by the presence of graduate students on the campus”, Corder said.
On Nov. 16 the U.S. House of Representatives voted 227-205 to pass H.R. 1, known as the Tax Cuts and Jobs Act, a tax reform bill that could take away numerous waivers and course reductions that graduate students rely on to help pay for their education.
The Graduate Student Association will vote on a resolution to voice opposition to the GOP tax plan, which has been criticized nationally for its rollback on tax benefits for graduate students and universities. By cutting over a trillion dollars in taxes from corporations and America’s wealthiest individuals, Republicans claim that the additional income to those sources will boost investment and facilitate job creation, catalyzing economic growth. Around 60-70 universities would be subject to such a tax, including the University of Chicago.
Students who take out loans to pay their taxes would no longer be able to utilize a deduction on interest paid on student loans, which can amount to as much as $2,500, as CNN Money said. Under the current US tax plan, this money is not taxed, as that tax is paid off by the federal government.
There are a lot of anxious graduate students at universities around the country right now.
In an official University statement on the proposal, BC denounced it because of its negative effects on students and philanthropic donations to school. Though it is true that many of these endowments are unbelievable large, it makes no sense to tax them.
David Kieda, dean of the University of Utah Graduate School, said wavier recipients would see a tax cut under the Senate proposal. I’m deeply in debt with student loans.
Such breaks are a big component in the efforts by various educational institutions to diversify their student bodies by making sure college remains affordable to working-class families.
And for what gain? Because the House Republicans have also chose to remove key tax deductions from college students and the middle class, however, it is inevitable that the economy will face challenges that may offset or even overshadow the moderate amount of growth the tax cuts will generate.
However, a corporate tax cut should be accompanied by other provisions in the bill that discourage American companies from shifting assets overseas; these include a global minimum tax of 10 percent on the subsidiaries of American companies anywhere in the world and a one-time, low repatriation tax of 12 percent on liquid assets brought back to the United States.
Rather than addressing the persistent unaffordability of college, these grad student and endowment “reforms” exacerbate the problem.
“We still do not know what terms will be included in any final legislation”, said Lynch in response to a question from the Justice about how the bill would affect low-income students and students who rely on financial aid.
The law would also decimate American competitiveness.