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Remove Provisions Increasing Tax Burden on Students and Higher Education from the Tax Plan

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Call for Congress to Remove Provisions Increasing the Tax Burden on Graduate Students and Higher Education from the Tax Cuts and Jobs Act

We as students, academics, researchers, employees, faculty, staff, administrators, and concerned Americans, oppose provisions in the Tax Cuts and Jobs Act targeting graduate students and higher education. Provisions in the House version of the plan include the elimination of deductions that benefit graduate students and people who have acquired college debt. The result of these provisions are that an estimated 145,000 students across the United States will see a tax increase as high as 200 to 400% under this plan. According to the IRS, over 12 million people benefited from the student loan interest deduction in 2015 alone. 

We ask Republican and Democratic members of House and Senate to come out against these provisions increasing the tax burden on graduate students and college graduates. We ask that these provisions be removed during reconciliation of the House and Senate plans.

These provisions will not only adversely impact universities, but graduate students specifically. They include:

Repealing of provisions from the Tax Code:

  • Sec. 117(d) (exemption of tuition remission/waiver from taxable income)
  • Sec. 127 (tax free employer paid education assistance)
  • Student Loan Interest Deduction
  • The Hope Scholarship Credit & Lifetime Learning Credit

The plans also includes altering the American Opportunity Tax Credit to eliminate tax benefits for part-time students, graduate students and non-traditional students (who take more than five years to graduate)

Currently, Sec. 117(d) allows tax-free tuition remission for individuals employed as graduate-level teaching and research assistants. The proposed tax policy would lead to the elimination of the tax-free nature of tuition remissions, which will lead to a situation where students can barely survive on their stipends. Eliminating deductions for student loan interests and eliminating tax credits will also disincentivize higher education. Further, the repeal of Sec. 127 will limit the educational and professional growth opportunities of university employees that makes them competitive in this global economy.

If these provisions in the plan come into effect, they will negatively impact the financial stability of graduate students, hinder their ability to complete their education, and afford basic living expenses. They will also hinder the ability for part-time students to afford an education, and hurt post-graduate’s ability to pay off their student loans. Students already face low wages, high costs of living, and college debt. The Tax Cuts and Jobs Act which passed in the House adds an increased tax burden on top of these. These students are contributing to their fields, the economy, bodies of research, and seeking to better themselves through the pursuit of education. This plan will result in many of them not being able to complete their research, education, and contributions to society.

Because of the aforementioned reasons stated above, we greatly urge Congress to amend the Tax Cuts and Jobs Act to remove these provisions from the plan, and to not increase the tax burden on graduate students and college graduates.

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