We also tax other benefits that you receive - like if you are granted housing in exchange for services rendered as a property manager. The IRS doesn't like bart

We also tax other benefits that you receive - like if you are granted housing in exchange for services rendered as a property manager. The IRS doesn't like barter systems. If you win money gambling or prizes in a competition you have to pay taxes on that too. If you're receiving 50k in tuition in exchange for work/research, that's a valuable benefit and part of your compensation. IMO the universities should pay their researchers more. They're effectively using the exemption and the high cost of tuition to lower their research costs. For many top institutions they get public funds, underpay their researchers, and use them to acquire patents which they license out for large sums. So they're publicly funded but they own the patents, earn a lot of revenue from licensing but tuition keeps going up like crazy. Politically it's probably a really dumb move, but they're receiving valuable compensation in the form of tuition. I'd love to have all my primary costs covered by my employer and be paid less (which would drop my tax bracket) too. Unis can pay their researchers more.