The tax reform bill passed by House Republicans on November 16 wouldn’t just slash taxes for corporations and billionaires, it would also dramatically increase the tax burden for graduate student workers by counting their tuition waivers — which they receive in exchange for their labor as teaching and research assistants — as taxable income.
Furthermore, by eliminating student loan interest rate deductions and the Lifetime Learning Credit, the House bill effectively makes graduate school financially out of reach for all but the wealthy.
“I would hope that people like me in grad school would be identified as what we are — we’re working class,” Santiago Vidales, a Ph.D. candidate in Spanish and Portuguese studies at the University of Massachusetts Amherst, tells In These Times. “We make the day-to-day of a university function.”
Em Hall, 38, recently left a successful career as a nonprofit executive to pursue a Ph.D. in Urban Planning and Policy at the University of Illinois at Chicago (UIC), where she works as both a teaching and research assistant.
“At my age, it’s definitely a calculated risk to switch fields and enter the world of academia,” she tells In These Times. If this bill had been passed before she applied to graduate school, Hall says she is “not sure I would have left my career to become a Ph.D. student in a field different than the one I’ve worked in for a decade.”
At UIC — where I’m also at Ph.D. student working as a teaching assistant — the minimum salary for graduate employees is around $18,000, far below the estimated living wage of $26,128 for a single adult in Chicago. Meanwhile, the waived tuition for out-of-state grads is $23,720 per academic year. In other words, under the House bill, low-paid UIC graduate workers would see their taxable incomes more than double without seeing any actual new income.
For international graduate student workers — whose visas typically require that they only work on campus — the financial situation is often even more difficult since their options for earning supplemental income are limited.
In certain academic programs with higher operating costs, including Hall’s College of Urban Planning and Policy at UIC, grads are already often required to pay tuition “differentials” — extra tuition fees that are not waived, sometimes up to $5,000 per semester.
For UIC graduate student employees whose work primarily involves administrative duties instead of teaching and research, a portion of their tuition waivers are already taxed because of how their positions are legally classified. This tax is “an effective, and brutal, pay cut,” says Sarah Patton Moberg, a sociology Ph.D. student who serves as co-president of the Graduate Employees Organization/AFT 6297, the union of UIC grad workers.
These graduate assistants “have to figure out how they’re going to make it through an entire month with no pay because of the extra tax withholding,” Moberg tells In These Times. “And on wages that don’t meet the cost-of-living expenses in Chicago, that’s no minor budgeting feat.”
At private universities, where tuition can range between $40,000 and $60,000 per year, grads would see their taxes skyrocket under the GOP House bill. The tax burden for MIT grad students, for example, would increase by an astounding 240 percent.
“No one goes to grad school to make money,” says Vidales, who is the co-chair of the Graduate Employee Organization/UAW 2322, the union representing teaching and research assistants at UMass Amherst. “People make it through on very little.”
“Taxing the tuition waiver seems, to me, a way to disincentive diversity in academia, not just from a socioeconomic standpoint, but in the sense that programs like mine have students at both the Master’s and Ph.D. level with a wealth of diverse experience in their schooling and in their work experience,” Hall says. “That was a huge part of the appeal of this program to me.”
The tax reform bill comes in the midst of a wave of graduate worker unionization at some of the country’s most elite universities, following an August 2016 National Labor Relations Board (NLRB) ruling that teaching and research assistants at private universities are employees and therefore have collective bargaining rights.
Now under Republican control, thanks to President Trump, the NLRB may reverse last year’s ruling on grad employees — something many university administrators are counting on.
Meanwhile, graduate workers at public universities like UIC and UMass — who have had the legal right to unionize for decades — are bracing for next year’s Supreme Court case, Janus v. AFSCME, which threatens to turn the entire public sector “right to work.”
“People have been coming together to form unions and there’s been a lot of energy around it, but it’s very precarious organizing with these looming Supreme Court and NLRB decisions, and now this tax bill,” Vidales says. “There’s so much out of your control.”
He adds that the House bill is not only an attack on graduate unions, but an attack on graduate school itself. “It would be ruinous. Everyone I’ve talked to says the chances of continuing studying would be really slim,” he explains.
The current version of the Senate’s bill would not make tuition waivers taxable, but whatever legislation the Senate passes will have to be reconciled with the House bill.
“Lawmakers should support the pursuit of higher education in ways that reduce the burdens on students, not just when they’re in their programs, but afterward when the student loans are looming,” Hall says.
Pointing to a recent report showing that 60 percent of House members and 76 percent of Senators hold educational degrees beyond a bachelor’s, Hall asks, “How many of them could have afforded graduate school if their own tuition waivers were taken away?”