8 ms·

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

• 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
        Ah, I was not aware of that. That's especially problematic given how low teacher salaries tend to be.
        • Balgair 9y ago
          They make up for it with good healthcare, pensions, and unions. You may not make much, but you'l make it to retirement. Hence the push-back against charter schools which have none, essentially.
• tiles 9y ago
  I do think we should simplify, and correct, the way grad students are paid. But I think the tax bill, with few public markups and no informed witnesses, is an extremely scorched earth way of approaching this problem. Can America afford three years for the markets to adjust and for current grad students to drop out? Does anyone know what the fallout of this tax bill becoming law will be, and will we recover?
• ejstronge 9y ago
  Where does the money to pay students come from? Often, schools receive grants designated to pay for teaching as well as a student’s stipend. It’s not clear that any granting organization will offer $1 million, though perhaps your wife’s institution is an outlier.
  • fhood 9y ago
    In my experience it comes from grants that the adviser gets for other research.
    • mattkrause 9y ago
      It varies a great deal from department to department, even at the same school. Many biomedical programs start with "rotations", where students do a few brief internships (a few months each) in different labs before choosing an advisor. This is covered by an institutional training grant like the NIH's T32 (https://researchtraining.nih.gov/programs/training-grants/T32 https://researchtraining.nih.gov/programs/training-grants/T3...). Once they choose an advisor, funding comes from a variety of sources: the advisor's research grants (e.g., R01s), fellowships directly to the grad student, and even money from the university in exchange for "service" like TAing. My impression is that training grants are rarer in the physical sciences, but there are more TAships.
• claytonjy 9y ago
  My (limited) understanding is the claimed tuition compensation plays a big role in grant funding; universities couldn't alter the accounting to get around this new tax without messing up the same grants that pay these students. I also suspect there's rules about charging students evenly for tuition; if they say it's now $100k/yr, that means non-funded students would have to actually be charged that amount.
  • betterunix2 9y ago
    "universities couldn't alter the accounting to get around this new tax without messing up the same grants that pay these students." Sure they could. For example, universities could raise the lab space fees they charge for grad student desks to match the loss of tuition. They can raise other fees professors pay out of their grants, add new fees, etc.
    • michaelhoffman 9y ago
      Research funders set rules that determine what costs are allowable. For U.S. federal funders, tuition up to a certain maximum amount is an allowable direct cost. An arbitrary "lab space fee" is not allowable for space on a university campus. There is a facilities indirect cost that partially pays for the cost of facilities but the university cannot increase it whenever they want. They have to justify it based on their auditable actual costs, and you can rest assured most are already claiming the maximum that they can here.
• s0rce 9y ago
  Yes, I recently graduated from a PhD program and this is all absurd. Your cost as an employee is always more than your take home pay, this is overhead and is basically what the "tuition" of a graduate student is akin to. It pays for the operational expenses of the university, land, maintenance, taxes, etc. No company/government lab would claim that your overhead expenses are somehow something you've earned/been awarded/gifted for the opportunity to work there. These overhead expenses can often approach the cost of your salary, especially when you make less money.
  • ejstronge 9y ago
    You raise an interesting point - in fact, one hypothesis for burgeoning benefits offered to employees is that they hide your compensation in various tax-shielded pots of money. From this perspective, the overhead costs of an employee and the tuition/facilities fees of PhD students are not so different from what happens in the working world. One large exception is the teaching function of PhD programs, which is often underwritten by outside funders (or by scholarships that students, themselves pursue). I'm not aware of a situation in which an employee would herself need to secure money to pay her overhead outside of academia. Thus, the comparison is a poor one - companies 'pay' you more by covering your overhead, but universities assess a tuition that is either paid by the student (e.g., in humanities) or by a funding organization (e.g., in the sciences).
    • SilasX 9y ago
      Yep. It gets to be pretty distortive. A highly paid employee might have an effective marginal income tax rate of 40-50%, so any untaxed benefit that the employer can expense is effectively being purchased at a ~45% discount (when you compare to what the employee would have to earn in order to buy it). That's the hole in the Amazon/Netflix HR philosophy of "lol why give you free stuff? we can just pay you more and you buy it yourself". When I eat the free food at an employer-paid conference I think, "wow, I am cheating the tax man" (because, under a proper accounting, that would be an after-tax expense but I'd being expensed by the employer and not treated as income).
  • xyzzyz 9y ago
• fhood 9y ago
  Grad students have to be listed as paying tuition because that allows their tuition to be included in grant requests which is what pays their stipend. I suspect that the tuition is higher than the compensation because you have to pay overhead on grants.
  • rspeer 9y ago
    I know there's insane complexity here, but why exactly would it be bad to remove a fictitious cost from a grant? The grant can still pay their stipend, for a lower total amount because $50K of it isn't set aside for the university to move from one pocket to another. I know other people in the university need to get paid, but isn't that why there is a huge, nebulous cost called "overhead" anyway? Fictional tuition is definitely not the only thing with "overhead" attached to it.
    • fhood 9y ago
      Overhead isn't nebulous, it pays for the operating cost of the lab. At least in the case of the lab my parents worked at, that money was crucial.
      • rspeer 9y ago
        I said "nebulous" because it's such a vague line item. It's probably fine that a grant doesn't have to itemize how much is paying the utility bills, how much is paying the janitorial staff, how much is paying middle management... and grant funders are fine with this too. I am not protesting the concept of overhead. I'm just saying, as long as there already is this line item called "overhead" that pays for the university's operating expenses out of the grant, why does there also need to be a line item called "tuition" for the same purpose?
• aisengard 9y ago
  Agreed that private universities should pay better, but like in any capitalist society they will only pay as much as they need to. In this case, and especially in the absence of graduate student unions (which the GOP also seem primed to do away with), not very much. The GOP plan does away with the student tax deduction, not to simplify matters, but to punish intellectualism since they're not voting GOP anyway. You can tell, because if they actually wanted to help people, there would have to have been long discussions with heads of universities to come up with a plan to not harm grad students. Obviously, that didn't happen. I'm not sure universities are to blame for fudging things to, say, get better tax treatment. That's just how the laws are set up. The new plan will do nothing but harm universities, their teachers, and their students. Everyone is still completely correct to blame the GOP for screwing them in this instance.
  • redler 9y ago
    More generally, there hasn't been time for "long discussions" of any kind, much less with heads of universities (tax legislation of this scope has typically entailed months of hearings, discussions with stakeholders and affected groups, negotiations, and overall vetting of the ideas and their implementation). There will be both intended and unintended consequences, and in the zeal to implement the very specific intended ones, there has been little incentive (and in fact a disincentive) to explore and reduce the space of the unintended ones.
  • weberc2 9y ago
    > The GOP plan does away with the student tax deduction, not to simplify matters, but to punish intellectualism since they're not voting GOP anyway. You can tell, because if they actually wanted to help people, there would have to have been long discussions with heads of universities to come up with a plan to not harm grad students. Obviously, that didn't happen. Alternatively, they didn't have much confidence that the folks who are exploiting grad students would be good consultants about grad student welfare. And failing that, there are other hypotheses--the current GOP is incompetent when it comes to executing its own agenda. The GOP could generally want to lower/simplify taxes (and I think it does), and it is merely executing poorly.
• throwawayjava 9y ago
  > In reality, they should "award" grad students $0 in tuition and pay them like what they are - employees (and deeply exploited employees at that!). Here's the rub. If universities do this, then the current tax bill is basically a cut to federal funding for science and undergraduate education. If universities do not do this, then the current tax bill places even more of the social cost of science onto graduate students. IMO the way out of the quagmire is two-fold. (1) Place a strict limit of 20% on overhead -- the sum of all expenses that aren't either researcher/educator salary or research/teaching equipment should not exceed 20% within certain revenue streams. This should be required for revenues from undergraduate tuition, non-taxed endowment earnings that aren't reinvested into the endowment, and revenues from research grants. (Why not $0? Because some amount of administration is necessary, and buildings need to be cleaned/maintained/secured. "Overhead" can mean waste, but it can also mean "literally keeping the lights on". 20% is negotiable, and perhaps this is something that varies from campus to campus, but "a lowish non-zero number" seems right.) (2) Only after doing (1), increase funding for science and public higher education.
  • ameister14 9y ago
    >If universities do this, then the current tax bill is basically a cut to federal funding for science and undergraduate education. It isn't, though. If there is 100 million allocated by the federal government for science and undergraduate education, that number gets spent whether or not universities charge tuition. It just gets distributed differently, it isn't cut.
    • throwawayjava 9y ago
      5 - 2 is smaller than 5 - 0...
      • ameister14 9y ago
        So you think nobody will apply for the grants, period?
        • 9y ago
• anonetal 9y ago
  I don't think this is that straightforward. One of the comments on the article said it nicely: graduate students are still being trained and are not very effective researchers, and they are getting a significant education in doing research even if they are not taking classes (whether it is "valuable" or not today is a different discussion). Already the cost for a postdoc is comparable to that of a student (including tuition) and probably about twice that of a student excluding tuition, and their research output can easily be more than twice that of a student (on average). There could be adjustments to the model, but charging tuition to the students is not that outrageous when you consider what the students are learning. Tuition is also typically charged on the standard credit rate for classes (pretty low for public universities).
• mattkrause 9y ago
  We've beaten this to death in other threads, but that's not how it (often) works. Grad students usually don't pay the tuition themselves, but someone often does. In the sciences, this often comes in the form of training grants from the NIH or NSF at the beginning of grad school, followed by individual grants to the student (e.g., NRSA) or advisor later on. Some people also get funded by private foundations. These funders aren't going to pay $1M per student, but they might very well pay $40k. So...the university sets tuition at $40k, takes that money when it can, and waives it when it no one else will cover it. Clearly, some kind of funding is required to put on courses, organize seminar series, and things like that. None of this is to deny that academia is broken in many ways, but it's not broken in the way you are claiming.
  • xyzzyz 9y ago
    >Clearly, some kind of funding is required to put on courses, organize seminar series, and things like that. Other countries manage to do all of those with a fraction of the cost of US universities. Courses should be paid for by undergraduate students tuition, grad students attend only a handful of courses throughout their studies. Universities already take “overhead” money from the NIH or NSF grants, the “tuition waiver” is just another way to get even more “overhead” than they would otherwise be able to justify. The real problem here is the cost disease, the fact that US schools spend much, much more than schools in other countries, for no apparent reason.
    • throwawayjava 9y ago
      The US actually does reasonably well in certain sectors -- many non-flagship state schools provide a decent undergraduate education at approximately the same cost as German universities. The in-state tuition at Missouri State University is $7,306 (yearly!), which is actually cheaper than the typical German education. Portland State is $9,030. I choose those because Missouri and Oregon subsidize less than other states, so tuition is closer to true spend, and I'm too lazy to calculate true spend. Germany's excellent mid-range public transit and relatively dense population makes a big difference in terms of total cost (including room and board), since many more Germans can live at home during university. But those things are more attributable to infrastructure and especially geography than cost disease. (The case of elite private universities is pathological. Call it whatever you want, they're just charging what they know they're worth. But they're also extremely atypical -- the US has A LOT of universities, and they have different sets of problems. Central Western Flyover State University does not suffer from the same problems as the Ivy League)
• w0m 9y ago
  >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! Because it does; not all PHD programs offer full stipends all the way through; it's not uncommon at all for grad students to have to get outside grants to cover their tuition as they go (or take semesters off until they do), somehow if the University is paying you not an outside source it shouldn't count as money - despite the university paying professors/facilities/etc for you? That's just off.
• tdb7893 9y ago
  If the universities pay the tuition to grad students then it will skyrocket the student's taxes, which is literally their complaint about the whole thing.
• monksy 9y ago
  I fully side with the idea of taxing the benefit as income for a few reasons: 1. Tuition is overly inflated 2. The "tuition benefit" is really a waver. Having a number there means that they can attempt to hardball you on compensation. (Really what you're working with is the stipend... but they claim you're getting this money + "$50000 tuition") It's pretty much the modern day equivilent of sharecropping.
  • maxlybbert 9y ago
    I really have no idea what the system should look like. I am surprised that the tuition waivers aren’t already taxable. If you owe somebody money, and they forgive the debt, the amount forgiven is considered a taxable benefit. That’s especially true if the “somebody” you owed the money to was the IRS. I’m not saying all current grad students are tax cheats. I’m saying that I’m surprised the law is set up how it is, since in other cases, whenever the IRS sees a dollar value, it tries to collect a tax.
    • throwawayjava 9y ago
      Because that's the way the law is written. The law was written that way because at one point, we, as a society, decided that we value accessible education and thought that this was a good way to provide that access.
  • s73ver_ 9y ago
    Neither of those justifies taxing a person making 30k as if they're making 80k.
    • monksy 9y ago
      They should be treated as a 30k worker and happen to be in the agreement that it's a valueless benefit. (PhD degrees are free)
• jackmott 9y ago
  Every industry has its set of tax breaks and subsidies. What some of us take issue with is the GOP will tend to attack tax breaks and subsidies for education and environmental issues (Solar, electric cars) while increasing tax breaks and subsidies for the ultra wealthy and fossil fuels. If anyone were proposing to do away with all tax loopholes and subsidies, that would be an argument I would entertain, but that is never what is proposed by either party.
• eh78ssxv2f 9y ago
  > In reality, they should "award" grad students $0 in tuition and pay them like what they are - employees (and deeply exploited employees at that!). It's not always the university paying the tution fee. If the PhD student is a teaching assistant, it might be the department. If the student is research assistant, it might be the NIH or whoever is funding the project. This could be public or private (e.g., Google Faculty research awards). I seriously doubt that in any of these cases, university would be able to claim $50k as gift since the university actually received tuition fee from the student although paid by someone else.
• SilasX 9y ago
  That was my thought too, but Scott Aaronson had a good reply (ctrl-f for "isn’t there some workaround"). Basically, it's not entirely an arbitrary number, because other key decisions and cash flows are based on it, and you'd have to get vastly different systems to all change a bunch of things at the same time in order to "refactor" it this way, which may be an impossible burden. https://www.scottaaronson.com/blog/?p=3542 https://www.scottaaronson.com/blog/?p=3542
• Balgair 9y ago
  My SO is also a PhD, but had a very nice fellowship that not only paid for everything, but upped the salary ~10k. Nonetheless, ~1/3 of it went to 'tuition', despite being in the field and away from all communication for ~2 years (off and on). Yes, the 'tuition' is meaningless BS and is a shell game the Universities are playing. Unfortunately, it will not stop from the simple reason that 22 years olds are stupid. My SO sat on some admissions committees and there are literally hundreds of super-star applications for ~10 spots. Just killer people with amazing backgrounds and drive, and they get rejected because there just aren't the spot. Grad programs have NO incentive to change as the people coming in are not going to be less numerous nor less amazing. The supply is so high and the demand is so low that the price is effectively 0 anyways. Really, if STEMy programs wanted to start charging the kids, the applicant pool would not change a bit in terms of quality of student/researcher. Yes, it would be much more WASPy, but the research wouldn't diminish in the slightest as the pool is just that large and good.