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This doesn't apply to all college students. This is specifically to PhD programs at each state's best research universities. The kind where we'd want our bright

This doesn't apply to all college students. This is specifically to PhD programs at each state's best research universities. The kind where we'd want our brightest students to attend, no matter what their financial situation. Currently, these students are paid a small salary to attend these programs ($20-$30k per year), and their tuition is waived. Under the new tax rules, the tuition waiver counts as income. So for example, a student at MIT who makes ~28k/yr is going to be taxed like they earn $80k/yr.

hartator 9y ago
It seems an issue for the university side, why they can't make the price of their tuition zero?
- ecnahc515 9y ago
  The universities prefer to give the discount because it let's them do stupid accounting tricks that let them get more money in grants and stuff. Universities should just adjust the tuition for these students instead of giving a discount.
- nshelly 9y ago
  Because they want to receive the full $80k from the grant - often federal - and pay the student $25-30k. The right answer is to fix the accounting measures. For a PhD student primarily doing research which benefits the university and grantor, and taking no or few classes, why are they paying tuition? If it’s for facilities or university staff salaries, then just send the full grant to the university directly, and let the university pay the students whatever both parties see as fair.
  - UncleMeat 9y ago
    > If it’s for facilities or university staff salaries, then just send the full grant to the university directly, and let the university pay the students whatever both parties see as fair. This requires a change to grant structure and cannot be done unilaterally by universities.
    - deleted 9y ago
      [deleted]
  - seanmcdirmid 9y ago
    Tuition waivers come out of grant overhead I think; they aren’t charged separately.
- learc83 9y ago
  Because if it's free only for employees, it's an employment benefit and it's taxable.
  - rayiner 9y ago
    Then don't tie the tuition waiver to employment as a graduate assistant. The university can certainly choose to charge students with demonstrated need less so long as it's not tied to employment.
    - learc83 9y ago
      If they make the income threshold low enough that graduate assistants would qualify, say $25k a year, then pretty much everyone is going to qualify. How many graduate students (outside of a few par time programs) make more than $25k a year? It doesn't make sense to consider parents income since graduate students are generally considered independent (even if they are being financially supported by their parents). How do you stop everyone from qualifying for tuition waiver? Even rich parents will just make sure their kids don't have any assets if they plan on going to grad school.
      - rayiner 9y ago
        You can’t have your cake and eat it too. If you’re not giving out waivers to those with the need, then you’re actually treating the waiver as part of the compensation for being a graduate assistant, and it should be taxed.
        learc83 9y ago
        You're arguing in circles. I know it's compensation, and I'm not the one who proposed we make it need based. I'm pointing out why your solution wouldn't work. >it should be taxed We tax what we want to tax, and we offer deductions to encourage behavior that we think is beneficial. Scholarship income used for tuition isn't taxed. We tax capital gains differently from ordinary income. We offer mortgage interest deductions. Should is subjective. There is no inherent reason to tax tuition waivers the same as employment income, apart from that's the way the IRS does it now (absent this specific deduction).

hartator 9y ago

It seems an issue for the university side, why they can't make the price of their tuition zero?

ecnahc515 9y ago
The universities prefer to give the discount because it let's them do stupid accounting tricks that let them get more money in grants and stuff. Universities should just adjust the tuition for these students instead of giving a discount.
nshelly 9y ago
Because they want to receive the full $80k from the grant - often federal - and pay the student $25-30k. The right answer is to fix the accounting measures. For a PhD student primarily doing research which benefits the university and grantor, and taking no or few classes, why are they paying tuition? If it’s for facilities or university staff salaries, then just send the full grant to the university directly, and let the university pay the students whatever both parties see as fair.
- UncleMeat 9y ago
  > If it’s for facilities or university staff salaries, then just send the full grant to the university directly, and let the university pay the students whatever both parties see as fair. This requires a change to grant structure and cannot be done unilaterally by universities.
  - deleted 9y ago
    [deleted]
- seanmcdirmid 9y ago
  Tuition waivers come out of grant overhead I think; they aren’t charged separately.
learc83 9y ago
Because if it's free only for employees, it's an employment benefit and it's taxable.
- rayiner 9y ago
  Then don't tie the tuition waiver to employment as a graduate assistant. The university can certainly choose to charge students with demonstrated need less so long as it's not tied to employment.
  - learc83 9y ago
    If they make the income threshold low enough that graduate assistants would qualify, say $25k a year, then pretty much everyone is going to qualify. How many graduate students (outside of a few par time programs) make more than $25k a year? It doesn't make sense to consider parents income since graduate students are generally considered independent (even if they are being financially supported by their parents). How do you stop everyone from qualifying for tuition waiver? Even rich parents will just make sure their kids don't have any assets if they plan on going to grad school.
    - rayiner 9y ago
      You can’t have your cake and eat it too. If you’re not giving out waivers to those with the need, then you’re actually treating the waiver as part of the compensation for being a graduate assistant, and it should be taxed.
      - learc83 9y ago
        You're arguing in circles. I know it's compensation, and I'm not the one who proposed we make it need based. I'm pointing out why your solution wouldn't work. >it should be taxed We tax what we want to tax, and we offer deductions to encourage behavior that we think is beneficial. Scholarship income used for tuition isn't taxed. We tax capital gains differently from ordinary income. We offer mortgage interest deductions. Should is subjective. There is no inherent reason to tax tuition waivers the same as employment income, apart from that's the way the IRS does it now (absent this specific deduction).