3 ms·

TL;DR: the Tax Cuts and Jobs Act, on which the House favorably voted today, includes a repeal of Section 117(d)(5) of the current tax code, which makes tuition

by GuiA 9y ago

TL;DR: the Tax Cuts and Jobs Act, on which the House favorably voted today, includes a repeal of Section 117(d)(5) of the current tax code, which makes tuition exemption at universities for grad students non taxable. Pretty much every single research graduate student in STEM fields benefits from tuition exemption. You typically make $15-$25k in research or teaching assistantship (I made $18k as a grad student at a large state university), but as an added bonus you don't pay tuition, which usually ranges from $10 to $50k. This means that even though your salary is low, it's still enough for the necessities. But with this change, if you make $20k in assistantships and get exemption on a $50k tuition, you're taxable on $70k. Depending on your state, that's likely most of, if not more than, your original assistantship. This is pure insanity. If this passes and remains in effect more than a few years, it will utterly destroy US grad schools, and by extension academic competitivity (who does the brunt of the teaching and grading for undergrads at US universities? Grad students). I moved to the US for grad school because the meager assistantship + tuition exemption made it worth it; without this, I would not have moved to the US for grad school, not started a company there, and not paid hundreds of thousands (if not millions at this point, I am not keeping track) of dollars in taxes to the state and federal governments. I'm not sure if the current administration is playing a game of who can destroy the US's economic and academic superiority as fast as they can, but if so they're certainly on the right track.

simplicio 9y ago
Maybe, though in STEM fields, anyways, the Department pays for the first year of tuition (essentially the University paying itself), and than an advisor pays out of his grant money (which is usually from the Fed. gov't, and so essentially the Feds paying themselves). So in a perfect world, Universities would just say grad-student tuition is 0$ for the first year, since they don't net any $ from it anyways, and than the Federal gov't would just up grants by whatever is needed to cover the extra tax bill, which would be less efficient but ultimately a wash as far as the money is concerned. In reality, I think this will happen to some extent, but not enough to totally reverse the change, and there will be a sizable drop in grad-students pop. in the US. Given extra grant money, Profs are likely to use some of it to cover their grad-students tax bills, but at the same time, those students will now be more expensive relative to fancy microscopes or whatever, and so fewer grad-students will be hired.

by GuiA 9y ago

simplicio 9y ago

Maybe, though in STEM fields, anyways, the Department pays for the first year of tuition (essentially the University paying itself), and than an advisor pays out of his grant money (which is usually from the Fed. gov't, and so essentially the Feds paying themselves). So in a perfect world, Universities would just say grad-student tuition is 0$ for the first year, since they don't net any $ from it anyways, and than the Federal gov't would just up grants by whatever is needed to cover the extra tax bill, which would be less efficient but ultimately a wash as far as the money is concerned. In reality, I think this will happen to some extent, but not enough to totally reverse the change, and there will be a sizable drop in grad-students pop. in the US. Given extra grant money, Profs are likely to use some of it to cover their grad-students tax bills, but at the same time, those students will now be more expensive relative to fancy microscopes or whatever, and so fewer grad-students will be hired.