Tax plan could impact grad student expenses

For most students, graduate school is an expensive endeavor. In the 2017-2018 academic year, graduate tuition was $6,627 for full time in-state students and $14,184 for full time out-of-state students at USC. 

And a clause in the Republican tax bill, currently up for debate in Congress, could increase that cost for current and future graduate students at USC and beyond. 

To help afford graduate school, many students rely on tuition waivers earned from teaching classes as teacher’s assistants or from doing research as research assistants. The waivers are intended to help graduate students who may have difficulty making ends meet with rent, gas and food on top of tuition. Currently, these tuition waivers are not taxed as income. 

Under the bill, tuition waivers will be counted as taxable income. In removing the tuition waiver exemption from the tax code, the cost of living for graduate students will increase. Clinton Wallace, an assistant professor of law who specializes in tax law and policy, explained that the change is intended to offset the cost of other tax cuts in the bill.

The majority of graduate students who receive tuition waivers are STEM students.

“This is embedded in a huge tax cut for some people but that tax cut is paid for by raising taxes on other people,” Wallace said. "One of those groups ... in the House bill is grad students [who] will see their taxes go up.”

Essentially, graduate students would be paying taxes on money that they never see. Some graduate students could see their taxes increase by as much as 400 percent, according to CNBC.

Graduate students at USC, like mass communications student Joseph Meyers, fear the move has the potential to financially devastate graduate students.

“I think for the Ph.D students especially, I think it could be a big deal as far as an increased cost for them,” Meyers said. 

The American Council on Education estimates that 145,000 graduate students across the country would be affected by this change if the bill passes.

145,000 graduate students use tuition waivers, compared to approximately 27,000 undergraduates.

Currently, Republican party leaders are hoping to bring the tax code to the Senate floor for votes by Friday. The bill has already passed the Senate Budget Committee.