Demand that Stanford Protect Graduate Education
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On Thursday, November 2, 2017, the House of Representatives introduced the Tax Cuts and Jobs Act. The Act introduces a number of changes that may affect graduate students, including treating tuition as taxable income, and eliminating or reducing deductions for student loans and other tuition scholarships. It also directly affects Stanford and other universities by taxing university endowments.
These changes threaten to make graduate education unaffordable. By counting tuition waivers as income, the new bill will tax the average Stanford graduate student on over $45,000 dollars of extra “income” per year. As a result, we will be taxed at a higher rate – preliminary estimates suggest that taxes can increase anywhere from 200% to 400%, depending on our specific funding packages.
Graduate programs at Stanford remit many students’ tuition costs in exchange for wages as teaching assistants (TA) or research assistants (RA), along with a modest stipend. While this stipend reaches us, the tuition fees do not: they are transferred from the University to our respective Departments. In effect, the University transfers this money from one pocket to another. Under the new tax proposal, graduate students stand to be taxed for “income” that never reaches them.
This bill can affect graduates students regardless of citizenship status; as long as a student pays taxes to the US government, they will be impacted. This bill will affect anyone with student loans by eliminating student loan interest deductions (currently at $2,500/yr). Moreover, while the Senate version of the bill would not affect graduate student tuition or student loan deductions, it would tax the University’s endowment. We fully expect these provisions to have long-term adverse effects on the University community as a whole.
Patricia J. Gumport, the Vice Provost for Graduate Education, notified students in an email on November 8 that the “tax proposal has the highest priority attention from Stanford’s leaders and we are advocating actively against these provisions.” While we appreciate the University's statement, it does not provide any concrete information about how exactly students may be affected by the proposed changes, what Stanford is doing to protect graduate students, or how the University will respond if the proposed changes are passed. As students, teachers, and researchers, graduate students need more information about how their jobs and livelihoods may be affected, as well as an active voice in discussions that may affect our ability to contribute to the University.
We therefore call upon the University to:
- Provide concrete information on (a) how graduate students on various financial packages may be affected by the proposed changes, with specific estimates and figures; and (b) what actions Stanford is taking to ensure that the tuition tax exemption and student loan interest deduction are preserved. We also want to know what specifically Stanford is doing in partnership with the peer universities and higher education associations that Vice Provost Gumport named in her recent email.
- Explain how Stanford will protect graduate students’ take-home pay if the tax deduction is eliminated. Specifically, we want Stanford to guarantee that it will adjust either our tuition or our financial packages to offset any changes in our federal taxes.
- Hold a Town Hall meeting for graduate students with President Marc Tessier-Lavigne, Vice Provost Gumport, and all other relevant personnel to discuss the tax plan and its implications for graduate students, as well as the continued financial viability of graduate education at Stanford.
We, the undersigned, ask the University to respond to these demands by December 1, 2017. Congress plans to vote on a tax reform bill as early as Thanksgiving. We hope that the University will collaborate with us on this pressing issue and continue to fulfill its responsibilities to the graduate community.
[Note: Please include your department, affiliation, and year of graduation (actual or anticipated) when you sign. For example: Jane Nguyen, PhD, English, 2018.]
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