Students Bound for Grad School Breathe Tentative Sigh of Relief

Over the past few weeks, undergraduate students with plans to attend graduate school and incumbent graduate students were whipped into a frenzy over a provision in the House Republican tax plan that intended to tax graduate student’s tuition waivers as income.

The provision would allow taxation on graduate student tuition waivers in addition to the amount they are already taxed on their student stipends (renumeration received for teaching and research they carry out at universities while getting their degrees). All of this penny-pinching vis-a-vis taxing grad students would help to finance the more than $1 trillion in proposed tax cuts for U.S. corporations.

The provision, if passed, would have rendered graduate school unaffordable for a large number of students including the 179,000 doctoral students in the U.S., according to a report by the Washington Post. In addition to making grad school unaffordable for doctoral students, according to numbers from the American Council on Education and reported by NPR, the provision would also make school unaffordable for the 145,000 students who received tuition reduction from 2011-12.

However, in no small part thanks to the discord and uproar that the provision was met with across the country, it was announced Wednesday that the unpopular provision would likely be stricken from the bill, which is not to say that it will be permanently struck.

This is all happening at a time when seniors at CC are applying for graduate school.  Megan Nicklaus, director of the Career Center, noted while there was significant chatter on campus regarding the provision, “We have not had students expressing concern.  Perhaps this is because students are waiting to see what the final bill will contain.”

Nicklaus clarified, “While the House Bill removed the graduate student tuition waiver exemption, the version passed by the Senate Dec. 2 did not contain any changes to the existing graduate student tuition waiver exemption of the tax code.”

When asked if the inclusion of such a provision in a finalized bill would impact advice proffered to CC students, Nicklaus responded, “Much of our conversation will continue as Career Center staff members, along with faculty members, help students assess if now is the right time to pursue advanced education… when talking to students about financial aid options and teaching and research assistantships that include tuition remission, the cost of tuition as a part of their taxable income would become a part of the conversation.”   

Senator John Thune (R-SD), a member of the conference committee in charge of reconciling the House and Senate versions of the bill said, “Nothing’s final of any of this stuff, but we’re trying to make sure that the provisions in law that are available to students for education continue to be available.”

Congressional Republicans intend to have a bill to the President by Christmas, so until then, while things look bright for tuition waiver’s tax-exempt status, the jury is still officially out until a final bill is submitted. 

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