One of the more contentious aspects of the tax reform bill currently going through Congress is a proposal to treat the value of graduate-student tuition waivers as taxable income. In the US most PhD programs charge tuition, like undergraduate programs, but PhD students are typically granted a waiver of tuition along with a modest stipend to cover living expenses. In the early versions of the tax bill, the value of this waiver — which could be $50,000 to $60,000 at a private university — would be classified as taxable income. University officials, graduate student associations, academics, and most journalists have condemned this aspect of the tax plan. As a university professor I have received multiple communications urging me to write my Congressional representatives, speak out publicly, and otherwise fight to defeat this legislation.
As of this writing, it appears the tuition-waiver piece will not be in the final bill, so university officials, the AAUP, the grad student unions, and other graduate-education supporters can rest easy. Maybe all that lobbying paid off.
This post was published at Ludwig von Mises Institute on Dec 13, 2017.