Tax Reform Under Trump 2017


Most universities have two general types of graduate students (not counting MD and law). Some students (business school, for example, but also of course MD and law) actually pay the grad tuition at the same rate being waived for those who are on an assitantship. The tuition-paying students make the calculation that they will be sufficiently better of with the degree as to justify the expense.

If the Yale grad student union wants its members to be classified as employees, then they should not receive educational credit (a degree) for the work they do for that pay.
When NSF (for sure, not so sure about NIH) budgets a grant award, it is for the total direct + indirect, not for direct only, with the university not getting ‘extra’ for the indirect. Tuition being charged to the grant is a 1-for-1 reduction in the money available to do the research. I’m not sure how often in practice tuition is charged to grants in the PhD programs in med schools, but in Arts & Science-type departments much of the time the school is willing to cover the tuition waiver themselves.


That’s why they get to charge a 67.5% management fee to cover all of that stuff, the rate seems high but I understand there is overhead. What I object to is the university adding a bullshit cost like tuition that is purely fictional in most cases. If she isn’t taking any classes, she isn’t costing the University anything other than her salary and modest benefits. She is very like assisting her faculty advisor in his research, so she is an employe not a student, IMO.

I don’t know if the right analogy is medical students, or residences and don’t really care that much. A fair tax system, taxes people on their income period. If graduate students are getting $40,000 worth of tuition for free than they should be taxed on it. They same way I got taxed when various companies sent to me get my MBA.

The current system gives University a perverse incentive to raise tuition because since PHd students don’t actually pay the tuition. Instead tuition is just a convenient way of ripping the NIH and NHS off. As far as raising undergrad tuition, let’s be clear Yale is setting on a $27.4 billion endowment fund, that’s more money than Amazon has (but less than Apple, or Google), or $2.1 million per student. Yale doesn’t need to charge anybody anything.


And how is a graduate student supposed to pay the taxes on 40k of tuition? They make no money. This is why they have such high loans when they graduate. I’ve done this. I was more poor than at any point in my life during grad school, truly eating ramen and having no health insurance just hoping I didn’t get sick, and you want to throw 40k worth of taxes on top of that so that the rich can get even richer?

Well, enjoy a very hearty fuck you!

This isn’t academic. This is real. And it will damage our country in ways that are not even quantifiable.


And yet they do. It’s almost like they won’t use the principal for annual operating expenses, and would rather just raise tuition to cover costs.

Weird. I wonder how many other universities do the exact same thing.


Furthermore, if they want you the money will work itself out. The people who pay to attend an Ivy League school are the ones who can afford to.


The “money will work itself out” can only mean that someone other than you will pay your tuition. But the whole point of this discussion is that you will still end up responsible for paying taxes on the tuition you didn’t pay.

So no, the money won’t work itself out.


What I mean is – if an Ivy wants a student, there are grants and scholarships that will be offered. Not related to this tax plan. And they can do that because they do charge the more well-off students tuition instead of raiding their endowment to offer free tuition to everyone.


No argument that grad students are poor, but they are profit center for university since they teach a bunch of undergraduate classes so university have huge incentive to keep them from starving.

Let’s run some numbers

Current grad student pay is say $30K. For tax purpose assume single and takes standard deduction. Currently, they pay $2,474

Now let’s see what happens under the house plan (Senate plan doesn’t have the change).

University of Hawaii (UH) grad student
Resident tuition 7.664
Less employeer tax free tuition reimbursement $5,250
Taxable income = 32,214
Tax under House plan $2.149

UH Grad student
Out of state tuition 18.384
Less employeer tax free tuition reimbursement $5,250
Taxable income $43134
Tax under house plan $3436

Ivy League grad student
Tuition 40,000
Less employeer tax free tuition reimbursement $5,250
Taxable income $64750
Tax under house plan. $6,030

So it looks like university will need to either stop charging tuition (which result in $600 year increase in grad students after tax income) or raise grad students salaries by $100-$150/month for public university or $300-$350/month for Ivy Leagues to keep their salaries constant. This isn’t exactly the kind of numbers that are going bankrupt our university, especially the Yales of the world.

Note the real increase in taxes is a far cry from the $10,000 that people were claiming.


I could quibble with the numbers (my stipend was 18K not 30K in 2013-15) but more saliently, admission to STEM grad school is competitive (if the program is worth anything). There are plenty of foreign students who will be more than willing to eat even a 6K increase in taxes, I doubt there will be a decrease in applications for seats. What I think will happen is that stipends will stay where they are, and foreign students will replace American students.


And why is this a good thing? It’s not as if we’re the most opened armed country to foreigners, brown ones, right now, and we should be teaching American students too.


I don’t think it’s a good thing?

EDIT: I agree we should be teaching American students. I think what I’m predicting as a demographic shift in grad school attendance was an intended effect to the tax reform. That was in my first post in the thread. :) I think it was intended because I think the Repubs would like Brian Rubinesque serfdom.


Well it didn’t seem like you were posing the outcome negatively.

I think it would be a complete disaster if we filled our graduate programs with nothing for foreign students on Visas who could very likely take their new found knowledge and just leave with it. I mean I think there is a lot of bullshit around work visas and this idea that there are no homegrown applicants who can and will fill various jobs, here’s looking at you Disney, but there is no better way than to ensure that happens by making graduate school not obtainable for anyone but the rich American students and foreign students.


My experience at harvard so far has been that we retain a ton of our talent. Last week I was at a birthday party for someone, and people went around the room talking about their citizenship tests. I was in the minority, in that I’m a natural born citizen…but everyone there was a citizen of the US.

A lot of people come here, and stay here.


I agree - higher education and job prospects are strong drivers for highly educated immigrants.

Re: the graduate stipend, in a way this kicks the question of graduate level teaching back to the schools. I think what’s most likely is that the moneyed schools will increase pay to keep the pay semi-competitive (although it’s not like graduate assistants get paid all that much to begin with) to make up for the tax difference while others will keep it as is.

It will likely concentrate research talent even more to schools with large endowments but this is a trend that’s been going on for the past 30 years so par the course.


I’d be remiss to not point this out as well, though I’m not in the know as to how this effects things (but one of the early organizers is in my lab, so hopefully I’ll have a chance to chat with her soon.)


My general belief is that most employers who get unionize deserve it. I think for most universities, tenured facility and administrators get treated well and everybody else gets treated like crap and so they richly deserve their union.


“I think not having the estate tax recognizes the people that are investing,” Grassley said, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”


If farms were an issue they could make an exemption for them. But they’ve never been an issue, just an excuse. Every farmer knows it.

Now at one time, it was a bit of an issue, but rather than fix that issue, they just raised the limit for everyone, because the farmers were never the people they have a fuck about.


If they made farmers exempt, watch the scramble as billionaires buy farms.


“I think not having the estate tax recognizes the people that are investing,” Grassley said, then he didn’t say: “as opposed to those that are just spending every darn penny they have, whether it’s on food or rent or clothes.”