Why the House Tax Plan on Tuition Waivers is Bad for Science and for America

This week, the Tax Cuts and Jobs Act is making its way through Congress. This legislation negatively impacts graduate students who received tuition waivers from their universities. Currently, graduate students are only taxed on the stipends they receive from their academic institutions. However, the U.S. House of Representative aims to change that by counting tuition waivers as income. This tax plan has already passed the House and today the Senate is soon voting on amendments to their version.

It is widely assumed that the daily responsibilities, and ultimate motivations, of graduate students are the same as those of high school or college students. However, stark differences exist between these groups. The daily responsibility of a high school or college student is to better oneself through classroom learning. The goal of a high school or college student is to gain knowledge and experience to find a good job following graduation so as to increase their future earning potential. In contrast, graduate students have greatly expanded responsibilities, and are crucial contributors to science. Graduate students, including those in the biomedical sciences, spend little time in the classroom being lectured to. Instead, these scientists actively propose new scientific paradigms, design experiments, write and publish in the scientific literature, and conceive new therapies for patients.

In our field of gene and cell therapy, behind every cutting-edge discovery and potential cure, are the efforts of countless graduate students burning the candle at both ends. In addition to research duties, graduate students teach classes, hold office hours for undergraduate students, grade papers, and mentor other junior level trainees. Graduate student research is the very foundation of our scientific endeavor. These students and their families make many personal sacrifices to do this work, and not just for their own future earning potential, but for the public good. Graduate students are not training to contribute to the scientific community in the future, they are contributing now.

Taxing tuition waivers will have a deleterious impact on graduate students, science, and society. In their triple roles as researchers, teachers, and learners, graduate students receive two primary benefits: a waiver of tuition associated with their studies and a stipend designed to support living expenses. Though one might predict that tuition pays for studies and a stipend pays for work, the situation is not as clear-cut. Many of the credits for which students receive tuition remission are allocated for their research in the lab or for teaching courses.¹ Given the hours required for researching, teaching, and learning, stipends are rarely a living wage. Much of the work graduate students perform is in essence “free” work donated to society. Graduate students do so because they see science as a public good and their work as a service to society. The fact that universities waive tuition expenses for graduate students is an acknowledgment of that public service.

The day-to-day function of research laboratories is dependent on the work of graduate students, and the repeal of the deduction for tuition waivers proposed in the Tax Cuts and Jobs Act puts the United States at a significant global disadvantage in recruiting and retaining talent in these critical positions.

Given that graduate student stipends average $29,000 (and can be significantly less)², increasing income by the $50,000 in tuition charged by some schools could triple our tax burden from $3,000 to nearly $9,000. While nominally in a 12 percent tax bracket, these students would be paying nearly one-third of their actual income in tax, greater than the marginal rate paid by individuals making up to $260,000 per year under the new proposal. Additionally, given the rapidly increasing expectation for the number of publications for career advancement, the length of graduate training is becoming burdensome, often up to a decade. Further, many graduate students are married and have young families. When considering that many research universities are located in expensive metropolitan areas where a living wage vastly exceeds $30,000, this additional tax burden would make graduate school an untenable pursuit for the majority of students who are not independently wealthy. Many others would be forced to quit their research, with a huge loss of taxpayer investment in their training.

Scientific progress benefits strongly from a diversity of perspectives, and many of our best scientists come from varied backgrounds. To restrict these careers to the economic elite puts in jeopardy the US’s position as a world leader in science and technology. In addition to restricting our ability to recruit top talent, many current US graduate students may choose to explore opportunities in other countries, or in non-science career paths. This hurts not only our future but also the work currently being done – work that has led to amazing advances in medicine like the recent approvals of two innovative gene-modified cell therapies for cancer. CRISPR gene editing is poised to further revolutionize the field of gene therapy, and the advances being made today by graduate students may very well be the next breakthroughs in medicine. We are now on the cusp of curing diseases previously believed to be untreatable, much less curable. These diseases affect millions of Americans, and include blindness, hearing loss, muscular dystrophies, sickle cell anemia, immunodeficiencies, infectious diseases, cancer and many more. An exodus of graduate students will undoubtedly set back these efforts, eroding America’s competitive edge, denying cures to patients who desperately need them, and hurting the economy as our workforce sickens.

We believe that this House Tax proposal will not only cripple the field of gene and cell therapy, but also damage the country where it’s most vulnerable. Retention of the tuition waiver deduction is essential for the future of American science and medicine, and for the health of our nation.

¹For instance, a senior graduate student with 9 credits will typically have 7 credits allocated for dissertation research and the other two for scientific seminars taking place in the evenings. Even when teaching a course for undergraduates, a graduate student will have that course listed for credit as a “Practicum in Teaching”.

^₂https://www.npr.org/2017/11/29/567169910/university-graduate-students-walk-out-to-protest-tax-plan-that-hurts-them

Related Articles