The U.S. House of Representatives has introduced a tax bill that includes proposed changes to the U.S. Tax Code that deeply concern graduate students and the administration and faculty of Virginia Tech.
The Tax Cuts and Jobs Act
UPDATE: The House Bill, known as the Tax Cuts and Jobs Act (H.R. 1), was approved in the House by a vote of 227-205 on Nov. 16. No one was allowed to introduce amendments from the floor, and debate was limited to four hours.
The bill, introduced before the Senate's version, eliminates a range of deductions. The bill consolidates the current seven income-tax-brackets into four, which may push some students into a higher tax bracket, depending on the size of their assistantship. The bill also converts some previously tax-exempt benefits to taxable income. The changes with the most impact on graduate students are those related to tuition assistance and waivers.
The House bill proposes converting tuition assistance and waivers, currently tax exempt, to taxable status. They would count as income along with a student’s stipend. The House bill language on page 97 calls for eliminating subsection D of U.S. Tax Code section 117, which exempts tuition reductions and waivers for graduate teaching and research assistants.
Hundreds of graduate students serving Virginia Tech as GTAs, GRAs, and GAs, receive tuition remission, and the change could be a substantial hardship for them. The total cost of 2017-18 tuition and fees for a full-time graduate student ranges from $14,621 to $29,861. This range is dependent on a several factors, such as residency status, degree program, the campus the student attends, whether the assistantship is full- or part-time.
The Bill also proposes eliminating the deduction for interest paid on student loans. We know that graduate students take advantage of that deduction.
The Senate Bill
The Senate also has proposed a tax reform bill. As currently written, that proposed legislation makes no changes to the status of tuition assistance and waivers, and maintains the Lifetime Learning credit. It also does not change the employer tuition assistance program. The Senate bill also retains the tax credit for interest on student loans.
Update: After four days of debate, the Senate Bill was approved by the Senate Finance Committee on Thursday. News organizations report the fulI Senate will consider it after Thanksgiving. It now contains a provision calling for the repeal of the individual mandate to have health insurance associated with the Affordable Care Act.
What Virginia Tech is doing
Virginia Tech’s Government Relations team has contacted the state’s U.S. Representatives and its two U.S. Senators about the university’s concerns about the tax bill.
Additionally, Dean Karen P. DePauw has shared analysis by the Council of Graduate Schools, to which Virginia Tech belongs. The Association of Public and Land-grant Universities, of which Virginia Tech is a member, also has analyzed the bill, as has the American Council on Education.
The Graduate Student Assembly has created a public Google Drive folder of resources, including shared graphics showing examples of how the House tax bill would impact students receiving tuition assistance while serving as graduate research or teaching assistants (GTAs and GRAs) and graduate assistants (GAs). The page in
Dean DePauw and other faculty members and administrators, as well as students and student organizations, have shared news articles, white papers, analyses, and data on social media sites to provide graduate students and others with more information about how the tax bills may affect them.
What you can do
Students can find information about the bill on a new webpage on the Graduate School website, including copies of the House and Senate bills, information from the Council of Graduate Schools and links to other analyses.
Dean DePauw is available to talk with students at 4:30 p.m. Mondah, Nov. 13, in Graduate Life Center Room B Monday.
Students who wish to may want to contact their elected representatives about the legislation and its potential impact on their lives and education.
Links to resources, news stories, and analysis
Council of Graduate School's tax reform resources
National Association of Graduate and Professional Students (NAGPS) information and resource page
Inside Higher Ed on Senate tax bill and higher education, Nov. 10, 2017
Politico: Senate Bill retains higher education deductions, Nov. 10, 2017