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How tax reform could price students out of graduate school

Ph.D. students Stosh Ozog and Miriam Rubensen could face a $20,000 tax bill on a $60,000 household income. Photo courtesy of Stosh Ozog


UC students and leaders are pushing back against proposed provisions that could leave some graduate students shouldering a tax bill so big they could be forced out of school or decide not to enroll at all.

Taxes would increase by more than 30 percent for many UC graduate students if the current House proposal is enacted – and some could see their liability soar by a whopping 400 percent. Even for those facing less drastic hikes, the increase could be enough to threaten their continued studies.

At issue is a proposed change to the tax code that would require graduate students to pay taxes on a tuition benefit that is currently covered as part of their funding package for graduate school – a dollar value that in some cases far exceeds the modest stipends they receive to pursue their research.

Roughly 23,000 of UC’s 54,000 graduate students receive these “qualified tuition reductions,” which cover the cost of their graduate education while they work for the university as research and teaching assistants.

The House bill would treat these tuition reductions as taxable income, in some cases pushing students living on modest stipends into tax brackets usually associated with much wealthier households.

Higher education leaders say the resulting squeeze could affect not only graduate students – who are a key part of a university’s research and teaching enterprise – but research and higher education more broadly.

Read full article, which gives examples of how some of our current grad students would be affected by the tax reform legislation that Congress is enacting.

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