UPDATED: Nov. 28, 2017 at 5:34 p.m.

Graduate students at Syracuse University say the contentious Republican tax plan, recently passed by the United States House of Representatives, could make graduate school financially inaccessible for many students.

The tax plan, passed by the House of Representatives on Nov. 16, would eliminate several sections of the current tax code that affect graduate students. It would count tuition remission — how universities waive tuition fees for graduate students — as taxable income and phase out deductions for educational assistance programs and tax credits.

“I am actually really, really, really, really scared,” said Jack Wilson, president of SU’s Graduate Student Organization.

Section 117(d) of the U.S. tax code states “gross income shall not include any qualified tuition reduction,” meaning tuition waivers do not count toward taxable income. The new tax plan eliminates 117(d), adding waived tuition costs to total income.

In his last year as a teaching assistant for PSY 205, Wilson said he earned $17,000 a year in taxable income. Without Section 117(d), his taxable income would skyrocket to roughly $53,000 per year, with the additional $36,000 of tuition remission counting as income. This would lead to the Internal Revenue Service charging him thousands of dollars more in income taxes, Wilson said.

If a graduate student taking 24 credit hours in an academic year has $36,000 in tuition remission — calculated from the cost of $1,500 per credit hour — and earns $5,000 in wages, under the new tax plan they would owe the federal government $3,456 if they are single with no dependents and use the standard deduction, Wilson said in an email to GSO. A student earning only $5,000 in wages with the tuition remission would have previously paid no federal income tax, he said.

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Chelsea Mixon, a doctoral student and graduate teaching assistant who’s receiving a tuition waiver, said SU would need to completely restructure the way it funds graduate students. Otherwise, Mixon said, college might become unaffordable.

“A lot of graduate students live paycheck-to-paycheck, which is scary for most of us,” said Sweta Roy, GSO’s vice president of external affairs, in an email. “I am fortunate enough to be single, but this tax increase would have a dramatic impact on graduate students who use their stipend to take (care) of their dependent and kids.”

About 145,000 graduate students in the U.S. receive tuition waivers, according to NPR.

Chancellor Kent Syverud, in a campus-wide email, said the university is opposed to any policy that would categorize tuition waivers as taxable income.

“As the legislative process continues, we will continue to monitor changes in the legislation and the Senate debate, engage our lawmakers and work to minimize the potential impact on members of our campus community,” Syverud said in the email.

In the email, Syverud also said the university is against measures that would eliminate the deduction for interest on student loans and categorize tuition benefits for employees and dependents as taxable income.

Wilson said the tax plan could impact SU’s research goals. If graduate school becomes unaffordable, students would be unable to attend research universities, he said.

After research funding dipped during former Chancellor Nancy Cantor’s tenure, SU has attempted to re-establish itself as an international research institution. In 2015, SU received the “highest research activity” classification for a doctoral university from the Carnegie Classification of Institutions of Higher Education.

“Graduate students are the basic labor force for research universities,” Wilson said. “If that labor force is depleted, it’s a simple fact that less research is going to get done.”

GSO is officially opposed to the tax plan. Wilson sent an email to the GSO listserv encouraging graduate students to reach out to local elected representatives, such as Rep. John Katko (R-N.Y.) and Sens. Chuck Schumer and Kirsten Gillibrand (D-N.Y.), speaking out against the plan.

Katko voted in support of the House bill. In an op-ed for Syracuse.com, Katko said the bill would cut taxes for the majority of residents in his district and spur investment from businesses in central New York.

GSO is also working with National Action Network, a civil rights advocacy organization, to arrange a meeting with local elected officials, Wilson said.

Joshua Fenton, GSO’s comptroller, said in an email he’s mostly worried about graduate students not following what happens with the legislation or contacting their representatives, unaware of how the tax plan could affect them.

“I hope that collectively, we can do enough to stop this, but if we can’t, which is a very real possibility that became even more likely when the bill passed the House, I am worried that some grads are going to get blindsided and (will) have to drop out for financial reasons,” Fenton said.

The House bill would also eliminate the student loan interest deduction, which allows borrowers who earn less than $80,000 annually to claim up to $2,500 on their tax deductions.

Under current tax rules, college students are able to receive up to $5,250 in tax-free reimbursements from their employers for tuition. The House plan would also make such payments taxable income.

Other removed deductions would include two college tax credits — Lifetime Learning Credit and the Hope Scholarship credit — that would be consolidated into one credit for the first $2,000 spent on educational expenses each year.

The new tax credit would only be available for five years, which is often fewer than the number of years graduate students — especially those earning Ph.D.s — are in college, on average.

The Senate is working on its own version of the tax bill and could hold a vote on the legislation as early as Thursday or Friday. Currently, the Senate bill keeps the exemption allowing graduate students to exclude tuition waivers from their taxable income.

Wilson said he hopes the Senate does not change its legislation to use the same language of the House’s bill, in regards to graduate students.

“If college generally is unaffordable, then in the long run we as a society are shooting ourselves in the foot,” Wilson said.

CORRECTION: In a previous version of this post, Chelsea Mixon’s title was misstated. Mixon is a doctoral student. The Daily Orange regrets this error.

Published on November 27, 2017 at 11:01 pm

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