The Washington PostDemocracy Dies in Darkness

Universities are also to blame for the GOP’s ‘grad student tax’

Charging us tuition, only to waive it, helps to define us as students instead of the essential workers we are.

Shouting protesters interrupted senators who were speaking to reporters before and after a budget committee vote on the Republican tax reform bill on Nov. 28. (Video: Jordan Frasier, Patrick Martin/The Washington Post)
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Graduate students are worried. The House of Representatives has passed a bill that would tax our tuition waivers from universities. For many of us, this would drastically inflate our tax obligations. Although at Yale University, we actually bring in incomes around $30,000 per year, we’d be taxed like people who make $70,000. The hole this would blow in the individual finances of graduate students would make advanced research impossible for many. I could wind up with $11,014 — more than a third of my actual take-home pay — going to taxes. This would mean I’d owe four times my current tax bill.

For good reason, the debate over this proposal has thus far focused on Republicans in Congress. University administrations have urged graduate students to join them in lobbying against the change. But while we should all be calling our representatives to urge them to oppose the measure, universities themselves bear a good deal of responsibility for this threat to higher education.

I’m a grad student, and the Republican tax plan could cost me thousands of dollars

It’s not the norm for PhD students to pay any tuition. Where I’m in graduate school, at Yale, the billing and payment for my tuition happen completely out of my view. The money moves from one institutional account to another. I’m never responsible for it, and I never see any of the money that I’ll supposedly be taxed on. I am currently in the third year of my PhD studies, and while I do teach, I am not taking any classes. It is unlikely that I will take any more classes while at Yale. Yet I’m still theoretically being “charged” tuition on some university administrator’s spreadsheet — and the GOP legislation would treat the waiver of that tuition as a taxable benefit.

In fact, though, not making graduate students pay tuition reflects the material reality of graduate school: We do valuable research and teaching labor for the university. It would be preposterous to bill us for this — akin to asking medical residents to pay the hospital for the right to train there. The fact that the university doesn’t actually make most of us pay the tuition it ostensibly charges is a tacit admission of this fact.

Science labs on university campuses like where I work are actually sources of income for universities. For most of what goes on in a university science department, the public is footing the bill. Professors apply for research grants to outside foundations and government agencies, most significantly the National Science Foundation and the National Institutes of Health. In the grant application, the professor proposes the budget for the laboratory, including equipment, supplies, and salary and benefits for whoever works in the lab — including graduate student researchers like me. Universities then take a huge amount off the top. Yale, for example, charges the public an additional 67.5 percent “overhead” fee on grants that faculty bring in. So if the National Science Foundation approves a proposal for a $100,000 project, the agency writes a check for $167,500, with that extra margin going to the university for “facility and administrative costs.”

Why even maintain the pretense of tuition, especially with Congress threatening to tax us on the “benefit” of having it waived? At a recent town hall here on campus with a lawyer from the university general counsel’s office, someone asked why the school didn’t just declare tuition to be $0. Yale’s attorney replied that the IRS could just “impute the income” of the abolished tuition to us anyway.

I’m not a tax lawyer, so I can’t speak to the truth of this assertion by my employer. (It does, though, bear mentioning that Yale reduces our tuition after our fourth year to a more nominal $600 per term. So it remains unclear why Yale couldn’t do the same for earlier years.) What I am is a geophysicist and a leader in the graduate employees’ union on my campus. And in both of these capacities, I’ve seen how the Yale administration benefits from pretending that we’re students liable for tuition, rather than employees creating value for the institution and our fields of knowledge.

Taxing college endowments will hurt red-state kids more than coastal elites

Like grants, tuition is another way the university makes money from science. While tuition looks mainly like an artifact of accounting for most graduate students in the humanities and social sciences (where the university just pays itself for tuition), in the natural and applied sciences, tuition is a way for the university administration to get more money out of the public. As the university bulletin explains, “for a standard [research assistant] appointment in addition to the salary, the grant pays half of the tuition.” In other words, the government — through the National Science Foundation, NIH, NASA and other agencies — is transferring $20,500 per year per research assistant into Yale’s accounts, at a time when the university endowment is at an all-time high above $27 billion. This tuition transfer certainly totals in the millions every year for Yale alone, and must add up to a mind-boggling sum across the country. Again, this is money that the public pays universities for granting graduate students the privilege of working for them to create more wealth for those same universities.

This is particularly galling at a time when the budgets of the public science agencies are under severe strain, reducing our country’s overall scientific output and putting intense economic pressure on scientists everywhere. I study the behavior of minerals at the very high pressure and temperature conditions of the Earth’s core. The molten iron outer core is responsible for generating earth’s magnetic field, which allows life on Earth. My work depends on advanced, expensive equipment. But universities are channeling grant money away from the sources that could support this work and into their own coffers by calling it tuition.

The most self-serving reason university administrators continue to charge tuition, though, is to use the fact that they waive payment of it as propaganda. To oppose our unionization, the administration here has repeatedly cited this money that we never see as evidence of our privileged status, suggesting that our income is much higher than it actually is (the exact argument they now want us to deter Congress from making). As Yale Graduate School Dean Lynn Cooley wrote in an op-ed last year opposing our union: “As a scientist, I know that facts matter, and here is a fact that readers should know: graduate students in doctoral programs at Yale receive full tuition support. This fact surprises many people, so it is worth repeating: doctoral students at Yale do not pay any tuition.” Not paying tuition is the industry standard, because universities need graduate work to run. What we do is valuable and necessary. Yet, Cooley continued, “In total, the minimum level of support Yale provides for a single PhD student during six years in graduate school equals nearly $369,000, including stipend, tuition and health care.” But nearly half that total is the value of the tuition that universities like Yale charge themselves (or get paid back by the taxpayers).

Adding all these facts up leads to a disturbing conclusion. Yale doesn’t want the Republican bill to pass, and neither do I. But it would appear that Yale and most other elite universities would rather maintain a steady income stream from the public and their ability to disavow our value to the institutions — even at the cost of our potential individual financial insolvency. Increasingly corporate university administrations have helped create the situation where the Republicans could try something like this. They could still change course in a way that would moot the tax bill: They could recognize that graduate student workers add value and stop charging tuition.

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