I Did The Math, And The Math *SUCKS*: The Threat of the US House Tax Plan

In case you hadn’t heard, graduate students are screwed.

I’m taking a break from the usual diary format of my blog because I’m not just speaking to my experiences this week. All graduate students in the US are on high alert due to the United States House of Representatives tax reform bill, which has just passed in the House. The bill as currently written includes a clause that eliminates Tax Code 117(d), which exempts the taxing of tuition and fee waivers as income.

To show how this tax bill will effect graduate students in concrete terms, I am going to be very honest here about my personal financial situation as a PhD student at a large public institution. I hope that this exercise will convince my readers to take action to support us and contact your representatives. Honestly, we really need your help.

So let’s do the math.

My fellowship includes $24,000 a year for six years. Six years is on the generous side considering that I already have my Masters. Although my figure is a couple thousand dollars short of what some of my friends at Ivy institutions make per year, our packages are pretty commensurate when you take living expenses into account. Every other year of my fellowship is paid by stipend or teaching assistantships. This means that I will spend half of my time here teaching, getting valuable experience but not working to the degree that it really detracts from my research and prolongs the time I need to complete my degree. Comparatively speaking, I am quite fortunate.

$24k is the amount that I actually receive and live off of each year, but there’s technically more to my package. My fellowship includes a nice health plan and guarantees housing in graduate apartments for at least my first two years. It also waives tuition for all six years and the out-of-state fee for my first year. Tuition for PhD students is always waived, and these fee waivers are all money that we never actually see. So for all intents and purposes, I earn $24k a year in taxable income in order to train to be a professor and contribute to the university.

This $24k is what I have to live off of. Out of it, I pay $8k-$9k in rent to graduate housing depending on whether or not I stay on campus over the summer. This is a fixed cost. That leaves me with $1,250 per month, in flexible income to pay for food, travel expenses (locally, to home, or to conferences), books, supplies, having (what barely counts as) a life, tithing, and to put towards savings. This is roughly equivalent to what someone makes working full-time at the minimum wage of $10 an hour. It’s not a lot, but it’s enough if you live frugally, which we all do. Under the current 2017 tax rate, I will pay $1,574. After taxes and rent, my net income is $1,118 per month.

According to the new House tax bill, the tuition waiver I ‘receive’ from my institution (around $32,000 a year) will also count as taxable income. If the bill becomes law, my gross taxable income will be $56,000 and I will pay approximately $6,160 in taxes. This is a tax increase of 400% and accounts for a quarter of my gross income. My net stipend will be less than $18,000 per year, which is a couple thousand dollars short of what I would make working full-time at minimum wage. After rent, my net income will be $737 per month.

This is what I will have available to pay for food, travel expenses, books, supplies, having a life, tithing, and to put towards savings. Obviously, savings, travel to important professional events and trips home for major holidays, and having a life will have to be thrown out to make ends meet. I may be able just to scrape by if I live below my means, but to be honest I’m in a more stable position than most graduate students. I’m single, I’m young, my institution’s tuition is $20k-$30k less than the Ivys, and I don’t have any debt. But for my colleagues who have more responsibilities and obligations, grad school will become impossible, and all the years we’ve devoted to our professions will be wasted.

Grad school is already so stressful; the financial stress will certainly be the last straw for many grad students. We sacrifice so much already because we believe in the work we do; we know the value of producing new knowledge and teaching the next generations what they need to know to improve their futures and the world’s future. We know the financial and emotional price of this service, and we pay it willingly. But we simply cannot afford to pay any more.

Here’s the big picture.

The fact of the matter is, unless you’re independently wealthy, grad school will become unaffordable. Access to higher education will shrink even further, limiting the economic mobility of already underprivileged groups and reinforcing economic inequalities in this country. Universities will be deprived of the greatest talent. Our children will lose competent college educators and our country will lose the economic and social benefits of our research. Education in the United States will be crippled, and we will fall far behind our neighbors.

Please, if any of this concerns you– if you feel any empathy for the sacrifices graduate students make, if you value education, if you disagree with the unfairness of the House tax bill–contact your representatives in Congress. For more information on who to contact and what to say, check out this resource guide. Remind them to do their job, to look out for the wellbeing of their constituents and oppose this unjust tax bill. Obviously the House doesn’t care about the voices of graduate students around the country. But if others speak up with us, I hope that we will be loud enough to talk some sense into the Congress.

Ginger Grad


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