New Bill Will Increase Taxes On Graduate Students By Almost 300 Percent


Robin Andrews

Science & Policy Writer

Brain drain. Prasit Rodphan/Shutterstock

The wildly unpopular House GOP Tax Reform plan recently passed, and another version of it is currently being debated in the Senate. While there’s plenty for policy wonks up and down the land to digest, the part that caught our attention related to graduate students and how much more tax they’ll have to pay if the bill becomes law.

As first pointed out by two analyses being circulated at Carnegie Mellon and the University of California Berkeley, PhD students could now be taxed almost 300 percent more than they already are. The annual stipend for doctoral researchers is already incredibly low, so to change the tax code to make this worse is rightly seen as reprehensible.


In short, it’ll put more people off entering academia. Plenty of these people will be STEM researchers, which are absolutely vital to the well-being of American society.

So how does the bill ensure this?


At present, PhD researchers get an annual stipend, which is basically like a salary. They’re almost always insubstantial; enough to get by, generally speaking. At the same time, they have to pay tuition fees, which can be covered by the university.

That stipend is taxable income, which means that the student must pay tax on it. The tuition fees, however, are not. This GOP House bill, however, makes that tuition fee taxable income, despite the fact that the fee isn’t used in any direct way by the student.


This means that someone with a stipend of $30,000 will suddenly find themselves having to pay tax on an $80,000 sum. This generally amounts to a yearly tax debt of around $10,000, something which plenty of PhD students couldn’t even dream of affording.

If you are a science student at Carnegie Mellon, for example, your taxes will rise from $2,384 per year to $9,459 per year – an increase of 297 percent.

Additionally, the bill also nixes something called the student loan interest deduction. This allows those earning up to $80,000 to deduct $2,500 in student loan interest paid, which as of 2015 helped 12 million people pay for their student loans. Now, it's set to disappear.

There’s no logical reason as to why these two caveats have found their way into the House bill, particularly when the very same piece of legislation gives enormous tax cuts to the wealthiest corporations.


As eloquently explained in an Op-Ed for The New York Times, a graduate student at MIT said that this will “make meeting living expenses nearly impossible, barring all but the wealthiest students from pursuing a PhD.”

They add that “the students who will be hit hardest — many of whom will almost certainly have to leave academia entirely — are those from communities that are already underrepresented in higher education.”


Doing a PhD in any subject is difficult, and it’s estimated that half of those undertaking one suffer from some form of psychological distress. It’s not just the hard work of becoming essentially a world expert on your chosen focus, but also the isolation, poor pay, and career uncertainty that comes along with it.

Yes, it’s a completely unique and often very enriching experience, and if you make it, you get a doctorate out of it. That’s not to say it isn’t extremely trying, though, and no one would argue that making it more difficult for students to work their way through a PhD is a good idea.


That, unfortunately, is precisely what the new GOP tax bill does. If you want the brightest American citizens to become scientists, then this will only prevent all but the wealthiest from doing so.


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