Republican Tax Plan may not Include Graduation Tax

If media reports are to be believed, the Republican tax bill may not raise the taxes for students pursuing graduate studies. The tax plan's final version mixes individual bills from Senate and House. No taxes will be imposed on graduate students receiving the few thousands of dollars they get in the form of tuition reductions as a kind of income. The Republican Party wants a vote on this particular bill prior to Christmas. For graduate students, this is a long-awaited good news. They are predictably concerned that the increase in tax would devastate their finances. If this bill is passed with the old provisions, only the super-rich could afford to pursue a doctorate degree.

The tax burdens

Students pursuing their doctorates usually earn a small stipend for research and teaching. The grant money or the university or the adviser also tend to either waive or cover the tuition fees. At present, the stipend is subject to taxation. The tax plan formulated by the house will categorize such student waivers as a kind of income. The proposed scheme will push students earning about $20,000 every year to $70,000 tax band.

Students are naturally happy with such an outcome. Margaret Downey, the elected representative for the graduate student union at UC Berkeley, terms this as a notable victory for all higher education. It also underlines the importance of coming together to win. She cautions that the bill can be bad for society, and more so for the working people.

Victory for students

The probability of this tax being passed, plus a few House Bill provisions eliminating the interest deductions on student loans, initiated protests across the United States. Many students were afraid they had to drop out of their course if a tax was imposed on the tuition waivers. They were happy to hear that the tax could be eliminated altogether. If the tax is passed, the influence of the United States across the world will decrease. Student leaders are not satisfied with the course of events. There is a continuing debate over the need to charge tuition for graduate students at all. The ideal scenario, according to student activists, is the tuition fees being fully abolished for the graduate workers. The struggle thus goes on. Higher education could still be hurt if endowments made by a few particular universities get taxed. Higher education will be negatively affected if these happen.

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