8 ms·

Universities are also to blame for the GOP’s ‘grad student tax’

• pdog 9y ago
  After reading through the article, it sounds like the tax treatment and accounting for PhD students is a mess. If anything, the new tax bill simplifies it.
  • maxerickson 9y ago
    The problem is that it simplifies it abruptly, for no good reason and in a way that will be more directly problematic for students than for the giant institutions they work for.
    • angersock 9y ago
      Then maybe they should strike. Remember strikes?
      • maxerickson 9y ago
        You think that'll get under the skin of Congress? Or do you mean they should strike once the changes take effect to get back to where they are now? Sounds like you are agreeing that it will suck more for the students.
      • landonxjames 9y ago
        Striking works when your employer is the one instituting harmful policies. In this case I don't think it would help the students at all.
        • angersock 9y ago
          Institutions skimming sometimes up to half of grants is basically theft and using grad students as super-cheap skilled labor is exploitation. This should be the straw that breaks the camel's back.
      • UncleMeat 9y ago
        There are walkouts happening today across the country.
  • tgb 9y ago
    How does the new tax bill simplify it? Before, I got charged taxes on the income that I had. Afterwards, I would get charged taxes on the income I have plus the tuition I never receive. I honestly don't even know how much that is, let alone which form I can find it on (certainly not a W-2) or how it'll go on my 1040.
  • briandear 9y ago
    I support the concept of higher education, but the implementation is terrible. They charge tuition, then reduce it with “financial aid” — its a weird wealth transfer especially with undergrads. Charge $50k per year, give a university “award” then make those that don’t get an award subsidize those who do using taxpayer provided “loans” that take a decade to pay back. The only winner in that situation is the Vice Provost of Useless Initiatives That Do Nothing To Actually Improve Education. For the cost of tuition, you could hire your own private adjunct professor. Given a 15-1 student faculty ratio — how much of that tuition is really paying for the actual education. For the legacy schools, the land and buildings are long paid for; endowments cover maintenance. Really what’s the marginal cost of educating a single student? In health care we complain about the $50 aspirin at a hospital, but we should be questioning the $50k tuition just as vigorously. Don’t even get me started on $200 textbooks. I am opposed to so-called “free” college (I’ve seen its effects on the quality of French mid and middle tier universities,) however, I am beginning to rethink my position as we are effectively spending similar amounts already with essentially no accountability to the taxpayers who are indirectly funding much of this malarkey.
    • throwawayjava 9y ago
      > its a weird wealth transfer especially with undergrads You could say the same thing about coupons, or any other mechanism for differential pricing. Also, most true scholarship money is not a differential pricing mechanism. Beyond a fixed discount rate offered to basically everyone (this is just the Kohl's "everything is always 60% off for everyone!" thing), most universities use (often endowed) scholarship and grants to maximize the quality of their undergraduate population, not for differential pricing. Giving Student 4.0 with $0 in the bank a full scholarship and giving Student 2.5 with $300,000 in the bank $0 in scholarship is not wealth redistribution. It's merit-based aid. And that describes how a vast majority of scholarships work.
• chasil 9y ago
  There is an easy solution to this problem. Go to Germany. http://www.bbc.com/news/magazine-32821678 http://www.bbc.com/news/magazine-32821678 Were I young and starting college again, I would be gone.
  • sampo 9y ago
    > Go to Germany. Or to pretty much any European country, except UK.
  • sanderjd 9y ago
    This is the important point - the US has spent the whole year handicapping itself in the competition for global talent. The effects of this will be felt in a decade, and nobody will remember where we went wrong.
    • weberc2 9y ago
      The US academic system has been growing increasingly dysfunctional for a decade; this year is just more of the same.
• seibelj 9y ago
  My wife is graduating from a PhD program and all her friends spam social media with "Republicans making my taxes go up!" posts. News Flash - universities claim they pay way more than a grad student's stipend, then get some sort of tax break by "gifting" the tuition. So if tuition is $50k, and pay a $30k stipend, total compensation is $80k - even though a student only gets $30k salary! Why doesn't the university just say the tuition awarded to grad students is $100k? $500k? $1million? Who cares? It doesn't really exist anyway! In reality, they should "award" grad students $0 in tuition and pay them like what they are - employees (and deeply exploited employees at that!). EDIT - Sure, PhD students might cost more than they are paid (although I seriously doubt it given the 80 hour weeks, classes taught, and metric ton of bullshit my wife put up with). Regardless, pretending that somehow my wife is being paid $80k and the university is doing her this big favor is a ridiculous. Universities should figure out how to fund the supposed costs some other way than through a giant, made-up tuition bill that's waived. Universities are full of the smartest people on earth, surely they can figure out how to give grants properly without this insane accounting maneuver.
  • prestonh 9y ago
    Spot on, but whoever is to blame the grad students shouldn't have to bear the burden unless we want a society of undereducated people.
    • deadmetheny 9y ago
      Not having a graduate degree hardly means you're undereducated.
      • Balgair 9y ago
        True, but MANY Middle and High school teaching positions require a Masters. Despite a severe shortage of 'STEM' teachers, districts have not relaxed this requirement and would be unlikely to do so even under the proposed tax bill.
        • deadmetheny 9y ago
• betterunix2 9y ago
  University accounting is like Hollywood accounting; mostly it is just a game that is played on paper to circumvent the spirit of various other rules. I seriously doubt the tax plan will collect anything from grad student tuition wavers, because universities have various alternatives to move the money around without forcing students to pay unaffordable taxes. The only real purpose of PhD tuition is to raid grants coming in to engineering and science departments to pay stipends for humanities students, and there is no shortage of creative ways to raid grants.
• rdtsc 9y ago
  > It’s not the norm for PhD students to pay any tuition. Ok if it's not the norm, why go through the charade? Just make the tuition $0 EDIT: Ah, found it in article - because they think IRS will charge them anyway. Well, ok, let IRS then charge them and see what happens. > As the university bulletin explains, “for a standard [research assistant] appointment in addition to the salary, the grant pays half of the tuition. Yap happened to me. Got a grant and a large part of it evaporated because it went to pay for my "tuition". Well there we go. Everyone is upset at the government, why aren't they upset at the universities. Let's check Yale's (the article talks about it) endowment for 2017. $27.2B - nice. How about they use that to pay a higher stipend to students instead of $30k for lab work, how about pay them $100k. And maybe Universities should stop skimming so much off of grants that are often coming from government labs. But of course it is easier and more fun to get the grad students to sit on the floor and yell "Look what Trump just did to us!". Makes for better news at least.
  • psychometry 9y ago
    Endowments are not slush funds. They're supposed to last forever and you can't just withdraw money whenever you feel like it. There are other savings to be made in administrative overhead that could cover higher salaries without touching the endowments.
    • rdtsc 9y ago
      > Endowments are not slush funds. I didn't say they are. > They're supposed to last forever and you can't just withdraw money whenever you feel like it. They are controlled by a board and no you can't just tie them to a corporate credit card and swipe it left and right. And some endowments are restricted based on the donors' requirements (a common one is "use this for one particular sport"). However using endowments to pay for tuition is also not unheard of. That's what fellowships or tuition endowments are. The bottom line a university with those kind of resources can find a way to pay students a bit more. They are not innocent victims attacked by the evil government which is how the issue has been presented in the media. This article explains things in more detail and is more balanced, that's why it kind of stood out.
• gnicholas 9y ago
  > Although at Yale University, we actually bring in incomes around $30,000 per year, we’d be taxed like people who make $70,000. The hole this would blow in the individual finances of graduate students would make advanced research impossible for many. I could wind up with $11,014 — more than a third of my actual take-home pay — going to taxes. This would mean I’d owe four times my current tax bill. I'm surprised that someone making 30k would pay any income taxes, TBH. I'm not sure where the $11k number comes from, but I'd be curious to see how it would be that high with the larger standard deduction that the tax bill proposes. Not saying it's wrong; just saying there's no support provided and it seems a bit high. Note: I am a (former) tax lawyer.
  • samfriedman 9y ago
    Many of my grad student friends simply don't file.
  • jjoonathan 9y ago
    They "make" 70k but only actually see 30k. They used to be taxed on the 30k, which amounted to little or nothing, but the proposal will tax them on the 70k. Paying the difference between tax on 30k and tax on 70k out of 30k minus living expenses is painful.
    • gnicholas 9y ago
      Yeah, but where does the $11k calculation come from? Did she run it through tax software from 2016, which doesn't include the larger standard deduction? This change would dramatically reduce the taxes owed by many people who do not itemize. The author admits she isn't a tax lawyer, so I'm curious to know how she arrived at such a detailed figure. Did she use a "how would the GOP tax bill affect your taxes" calculator from some website? She didn't just pull the number out of thin air, and its odd she doesn't say where it came from.
      • mattkrause 9y ago
        I just sketched it out above and 11k seems about right.
• ams6110 9y ago
  TLDR: They could still change course in a way that would moot the tax bill: They could recognize that graduate student workers add value and stop charging tuition. And that's what they'll do, assuming the changes are passed into law. They'll find some other line item in the grant or overhead calculation to cover that expense. It's all a shell game, which is why I believe that the tax code should be vastly simplified. It's too easy to navigate around any individual provision, if you can afford to pay someone who knows how (and universities can).
  • mattkrause 9y ago
    The thing is that most of this money is coming for the feds already, so the net result of all this will be close to zero (except for screwing over a bunch of people who are already in pretty precarious situations).
• tabeth 9y ago
  I've edited my post to better illustrate my opinion. I don't have any opinion on whether or not PhD students are employees or not, however, what I do want is consistency. So if PhD students are indeed students, yet receive a massive tax break in the form of "free tuition" (contrast this to imaginary undergraduate working for a college, who receives income from the college from a job and has to pay post-tax income for tuition) then undergraduates should have the same benefit (that is, tuition reduction from pre-tax income, if they work for the school that they go to). That's it.
  • mattkrause 9y ago
    Your first point is false. Many--but not all--of the grad classes are sort of fictious. I took several semesters of "Dissertation Research in Progress", which had no designated instructor, no meeting room, and in fact, never met. I'm sort of open to the idea that if you get a benefit, you pay for that benefit, but those classes are more of a book-keeping exercise than an actual boon.
    • tabeth 9y ago
      Similarly empty classes can be found in plenty of undergraduate programs, especially those taken primarily by atheletes at D1 schools [1]. Or even by students taking seminars that they create, or doing an undergraduate thesis, or... [1] https://www.usatoday.com/story/sports/ncaab/acc/2012/12/20/north-carolina-basketball-football-julius-peppers/1782113/ https://www.usatoday.com/story/sports/ncaab/acc/2012/12/20/n...
      • mattkrause 9y ago
        The scale is not even remotely close. My undergrad thesis "course" was a single credit for a single semester. I took 4-5 other courses at the same time, all of which were "real". In contrast, "Dissertation Research" was essentially a placeholder for the entire semester. As it happens, my brother was a D1 athlete. None of his courses were fictitious like this either.
        • 9y ago
• Exo_Tartarus 9y ago
  I worked in the administration of a flagship state university. Instead of spending millions of dollars on salaries for bogus administrative positions like 'Senior Vice President of Strategic Initiatives', put that money towards grad student salaries and bringing down general tuition.
  • B1FF_PSUVM 9y ago
    That's not how you win friends and influence people, to coin a phrase ...
• graeme 9y ago
  Will this also affect scholarships at the undergrad level? i.e. need based aid or merit scholarhips? Law school as well has a lot of these. The articles focus on grad students, so it hasn't been clear if tuition rebates at other levels are affected.
• s73ver_ 9y ago
  Nobody but the GOP is to blame for what's in the GOP's bill.
• theptip 9y ago
  I asked a friend who recently completed a PhD about this, and he was pretty scathing about the UC system; he gave the same explanation as the OP. TLDR: the reason the universities do this fake tuition fee plus rebate combination is basically money laundering; their grant money can be spent on paying for students, but not on capex like building new campuses. So by artificially inflating their top-line tuition fee spend, and then clawing most of it back in the form of a rebate, they are able to repurpose grant money for other expenses. The problem with this situation is that it's actually not in the universities' interests to help grad students; their best play is to let grad students get ground into the dust a bit more and then point at how awful the Trump administration is, knowing that the Republicans will get the blame. In a sense, the worse it goes for students, the better, as it increases the likelihood of a concession that enables the universities to continue their money laundering. However hard it is to be a grad student in the US, there's still a lot of competition for each one of those low-paying grad student spots, so even if demand for those jobs goes down a lot, the seats will still be filled.
  • dragonwriter 9y ago
    > However hard it is to be a grad student in the US, there's still a lot of competition for each one of those low-paying grad student spots, so even if demand for those jobs goes down a lot, the seats will still be filled. Yes, but grad students aren't fungible commodities; if the best grad students with the best choices don't want to go to US schools, it will impact the quality of research, the ability to attract top talent at other levels, the ability to attract funding, and the ability to generate value through research (patents, etc.), as well as the quality of graduates and their future income potential, which affects things like likely future growth of endowments. Your analysis of the Universities’ interest is correct, in terms of financial interest, only in the shortest possible term, which might be key for the kind of for-profit public firms that live and die by the next quarterly report, but most universities aren't like that.
    • theptip 9y ago
      > most universities aren't like that. I hope you are right, but I'm not so sure. We'll see I suppose.
• ejstronge 9y ago
  > It would be preposterous to bill us for this — akin to asking medical residents to pay the hospital for the right to train there. Interestingly, this historically was the case, and continues to be the case for some residencies in the United States. This provides support for assessing tuition as opposed to treating students like employees.
• Overtonwindow 9y ago
  What is also missed is how much universities are dependent upon international graduate students because they pay the most. Then when those students demand GTA's the universities dream up new, costly classes, labs, and recitations, for no credit, which are not necessary to graduate, but are forced upon the undergraduates and go towards padding the GTA budget.
• rapjr9 9y ago
  Maybe the entire purpose of this tax change is to kill both research and the universities? The GOP seems to generally be opposed to both. Make it impossible for the grad students to survive, that means less grad students so less research gets done, and the university gets less research funding and less royalties from patents. Seems like a clever indirect way to kill two birds with one stone, like something a politician would think of.
• kapauldo 9y ago
  Hard to sympathize with a blue blooded yalie.