Tax Cuts Paid for by Taxing Graduate Student Tuition Waivers

On Thursday, the House of Representatives Ways and Means Committee released the “Tax Cuts and Jobs Act.” Among many provisions that would affect higher education, the current draft of the bill would make tuition waivers for graduate students subject to income tax, increasing the tax liability of hundreds of thousands of graduate students.

Specifically, the bill amends Section 414(t)(2) of the tax code by striking section 117(d), which directs that “gross income shall not include any qualified tuition reduction.” In 117(d)(5), the current tax code specifically defines tuition waivers for graduate students engaged in teaching and research as “qualified tuition reductions,” and therefore not taxable.

This additional tax burden would cut into the modest stipends with which many graduate students already struggle to make ends meet.

The Ways and Means Committee is marking up the bill this week, with both Democratic and Republican committee members offering amendments. A few amendments have already been made. With Congress aiming to pass this bill by Thanksgiving, it is urgent to speak out now against this provision.

Click here to send urge Congress to oppose this provision.

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