New legislation could significantly raise taxes for university students
The holiday season is upon us and, according to President Donald Trump, Americans can expect “a big, beautiful Christmas present in the form of a tremendous tax cut.” But numerous reports say lower-income citizens will see the least benefits, and graduate students are especially in danger of financial hardship.
The Tax Cuts and Jobs Act of 2017 — passed by the U.S. House of Representatives on Nov. 16 — contains a few provisions that could negatively impact college students. The bill repeals the student loan interest deduction and, most concerning for graduate students, the tax-exempt status of tuition waivers for those working as teaching or research assistants. In other words, they would be taxed on the cost of tuition.
Although the U.S. Senate version of the bill — expected to see a vote this week — does not contain the tuition waiver provision, it remains to be seen what the final legislation will include, as both chambers of Congress will likely vote again on a final version.
Noah Charles, a fourth-year OSU physics PhD student and research assistant, has a plan if the provision goes into effect. “I will try and get out as fast as I can,” he said in a late-November interview in the school's Physics Research Building, “because I would have to eat deep into my savings even to afford this for one to two years.”
Charles earns an annual stipend of $25,000 and currently pays about $1,460 in annual taxes. If the tax provision goes into effect, he will have to add his $33,000 out-of-state tuition cost to his income and pay a new annual tax amount of $5,600.
Considering his monthly bills, including rent, a car loan and student loans — which he's been trying to proactively pay off — he said, “I would be seeing roughly three quarters of my total take-home pay going to fixed expenses. … I've talked to so many students who have higher fixed expenses than I do. We're especially worried about graduate students with chronic medical conditions and disabilities.”
Throughout the month of November, Charles and other OSU graduate students have been organizing protests of the tax bill. And they formed Save Grad Ed, a national coalition of students.
“Ohio State has seen so much action recently because there are just so many graduate students here,” Charles said. “There were similar movements on the West Coast and on the East Coast and we're trying to fold all of these efforts together.”
Charles and his fellow protesters participated in a march and rally on campus on Nov. 13 and collected petitions, which they delivered to Rep. Pat Tiberi, a senior member of the House Ways and Means Committee, which oversees tax writing. The students' list of demands for Congress were as follows: retain the tax-exempt status of tuition wavers, preserve the student loan interest deduction, kill any bill that punishes students for pursuing higher education and actively promote education with financial support.
“We [also] demanded that his staff … make a public statement about whether or not it supports this provision specifically, and that Rep. Tiberi meet with us before the reconciled bill is passed in December,” Charles said.
“Rep. Tiberi has relayed the graduate students' concerns to the Chairman of Ways and Means,” Tiberi spokesperson Olivia Hnat said in a statement to Alive. “He also spoke to Ohio State about the provision. Both of those discussions took place before the [student] sit-in [on Nov. 16].”
OSU Vice President of Government Relations Stacy Rastauskas confirmed to Alive that the university had engaged with all levels of government on the issue. “[OSU President Michael Drake] was very vocal as soon as we saw the first draft [of the bill] — engaging with members of the Ohio [congressional] delegation, members that sit on the Ways and Means committee [and] members of the House of Representatives.”
And on Saturday, Nov. 25, President Drake published an opinion piece in the Columbus Dispatch, outlining the impact of the tax bill on students and higher education in general.
“The university, President Drake and our team, as well as graduate students and others, are weighing in with our two senators to express support [because] their bill doesn't contain the provision that would affect the tuition waiver,” Rastauskas said. “Our ultimate goal is to preserve [that] in the final package.”
Save Grad Ed will continue to do its part with actions such as the national Grad Student Walkout/Rally, which, at press time, was scheduled for Wednesday, Nov. 29. Instead of refusing to work, Ohio State graduate students scheduled a “grade-in” protest at the Ohio Union, with teaching assistants planning to bring papers to grade to demonstrate their labor.
Even though the tuition waiver provision may not make it into law, Charles said he is not entirely hopeful. “This assault on higher education by the GOP didn't begin here and it likely won't end here,” he said. “I don't feel any sort of economic or job security knowing that this is the kind of thing that some of them would pass.”
Correction: An early version of this article mentioned OSU's "Psychics Research Building," which would be awesome if it actually existed. (It's the Physics Research Building.) Alive regrets the error, which we might have seen coming had the original reference been correct.