The presidents of the state’s two research universities say a provision in the GOP tax rewrite would make it much more expensive to earn a graduate degree.
Nearly 9,000 graduate students at Washington’s two research universities could see their federal income taxes double under the GOP’s tax proposal, a change that could make pursuing a graduate degree “much more challenging, if not impossible,” the presidents of the two universities say.
In a joint letter, University of Washington President Ana Mari Cauce and Washington State University President Kirk Schulz said the House measure “would lead to a completely unaffordable increase in taxable income” for graduate students. The letter was sent this week to members of the state’s congressional delegation.
The House version of the GOP bill would tax tuition waivers for campus employees, including graduate students. That provision isn’t in the Senate’s version, but it could be added as lawmakers reconcile the two measures.
This fall, the UW offered $32 million in first-quarter waivers to about 7,000 graduate students. Those waivers are given to students who serve as teaching or research assistants while they’re pursuing advanced degrees.
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Washington State University had 1,900 graduate students receiving just over $16 million in tuition waivers.
Cauce and Schulz say not only would the provision make graduate degrees more expensive, it would make it tougher for the two universities to be globally competitive.
At the UW, graduate students have started to mobilize to fight the proposal, said Viral Shah, a Ph.D. student in atmospheric sciences.
Shah says his tax bill would roughly double under the plan. He makes a stipend of $30,000, which is already taxed, for research he does at the UW on air pollution. In the past, he has also earned that stipend through teaching.
Shah, who is from India and pays nonresident tuition, also gets a $30,000 tuition waiver to pay for his education. Under the plan, that, too, would be taxed, making his taxable income about $60,000, even though he only makes half that amount.
If the tax waiver passes, Shah said he would be in a difficult situation. He has spent five years on his Ph.D. and has another two years to finish.
It is already hard to make ends meet in Seattle on such a low salary, he said, and having to pay twice the amount of federal taxes would only make the situation worse.
Nearly 87 percent of all UW graduate students made less than $50,000, university officials said. They estimated that a graduate student making a $31,800 stipend currently pays about $2,743 in taxes; if the GOP provision passes, their tax liability would go up to $4,236 for in-state students and $5,774 for out-of-state students.
On Wednesday, several hundred UW students gathered on campus at Red Square to protest the move, as part of a nationwide day of action against the bill.
The protest was organized by UAW 4121, the union that represents grad students. One union member, Monica Cortes Viharo, said she has calculated that her federal income tax would go from $1,100 to $5,000 a year if the measure passes.
Cauce and Schulz called tuition waivers an important tool for recruiting and retaining graduate students.
The graduate students work in science, technology, engineering and math fields “that drive our state’s economy,” the university presidents wrote, and the students also make up “the next generation of desperately needed doctors, nurses, computer scientists, engineers, and farmers in our state that will continue to build and innovate in our economy.”
In their letter, the presidents urge lawmakers to retain a measure that allows taxpayers to deduct up to $2,500 annually from their taxes on student-loan interest. The House plan, which eliminates that deduction, would increase the cost of student loans by an estimated $24 billion over 10 years, the presidents wrote.
Washington’s four Republican U.S. House members voted in favor of the GOP tax bill Nov 16. The state’s six Democrats opposed it.