The Tax Cut and Jobs Act passed by the House of Representatives on November 16, 2017 includes language that would repeal a provision in the Tax Code that currently excludes tuition waivers from gross income for qualifying students. The Senate bill, passed on December 2, does not have a corresponding tuition waiver provision. Members of Congress will now work to reconcile differences between the two versions in conference committee with the goal of having a bill to President Trump before the holiday recess.
According to AFS Executive Director, Douglas J. Austen, “Graduate programs are critical to important scientific research, especially fisheries research. Further, graduate training is the key to filling future natural resource conservation and management positions with qualified professionals. Both of these functions benefit society as a whole. The proposal to tax tuition waivers, if passed, will damage our graduate student member’s financial health and ultimately make it more difficult for our best and brightest students to pursue and complete their higher education.”
Tuition waivers are given to students, typically graduate students, as part of financial aid packages. In exchange for helping with research or teaching duties, a school waives a portion or all of a student’s tuition. Students never see a dime of the money, but the House tax plan would require them to pay federal income taxes on the amount of tuition they aren’t paying. Students in many competitive Master’s and Ph.D. programs could be forced to report thousands of dollars in additional taxable income.
Chairman Pete Sessions (R-TX) is leading a letter to House and Senate leadership to strongly oppose the repeal of the income exclusion for graduate tuition waivers. Please consider asking your member of Congress to sign-on to the letter.
You can find your House and Senate members here.