Students rally against the proposed GOP tax reform bill at Union Square, NY.

Graduate students in New York City rally against the proposed tax bill in late November.Credit: Shannon Stapleton/REUTERS

Jessica Frick is the first in her family to graduate from university, and she hopes to be the first to obtain her PhD. But a looming decision on US tax legislation could drastically increase taxes on university students such as Frick, who worries that she might not be able to afford to finish her chemistry doctorate at Princeton University in New Jersey.

Many US universities waive tuition for students who conduct research or teach. But a provision in a tax bill passed by the US House of Representatives in mid-November would add that tuition to students’ taxable income. The vote prompted demonstrations at more than 60 universities across the country on 29 November. And several graduate students were arrested on 5 December while protesting outside the Capitol Hill office of House Speaker Paul Ryan.

Tax legislation passed by the US Senate on 2 December does not include the provision. But students, universities and advocacy groups are hoping to beat back the provision in the House bill as lawmakers work to reconcile the two and prepare to vote on the revised legislation.

Institutions including Johns Hopkins University in Baltimore, Maryland, Tufts University in Medford, Massachusetts, the University of California system and Ohio State University in Columbus have sent letters to, or in some cases, met with members of Congress to keep tuition waivers tax-free. The Association of American Universities (AAU) in Washington DC, which represents 60 US universities, has also pushed back in meetings and letters. "This is not in America's national interest," according to a missive that AAU co-signed with 45 other higher-education associations.

Paying for it

Many worry about what will happen if the tuition tax survives. “I would have to get a second job,” says Frick, who spends up to 60 hours a week in the lab. “It would be impossible.” Her roughly US$30,000 annual stipend barely covers her living expenses and medical costs to treat a serious jaw condition.

Janice and Sean Hudson — geography PhD students at the University of Delaware in Newark — nearly exhaust their stipends on living expenses and supporting their three-year-old son. If the tuition tax passes, they may have to take out a loan; in the worst case scenario, one of them might have to drop out.

The systemic effects of the tax would ripple through science, technology, engineering and mathematics (STEM) in the US; STEM students receive 60% of US graduate tuition waivers, according to the American Council on Education in Washington DC. Current students might leave, and prospective ones could decide against applying to US graduate schools. “The US could wind up with a shrinking pool of PhD students, leaving research labs without qualified graduate students to help PIs conduct research,” says Jennifer Zeitzer, director of legislative relations at the Federation of American Societies for Experimental Biology in Bethesda, Maryland.

The tuition tax could also stifle socio-economic diversity in science. “Those who can afford to pay more taxes can go to graduate school. Those who can’t, won’t,” says Andrew Campbell, dean of the graduate school at Brown University in Providence, Rhode Island.

Frick paid for college with $20,000 in loans and by working a series of internships and part-time jobs. She says that a tuition tax would have prevented her from applying to graduate school. “I was already in so much debt, I honestly would have probably gone straight into any job I could get,” Frick says.

Looking at the numbers

Income-tax calculations depend on several factors, such as marital and family status, as well as tuition costs, which differ by university. But some students have taken a stab at the maths.

For students earning around $37,000 annually at Yale University in New Haven, Connecticut, their taxable income could double, estimates Yale immunobiology PhD student Michael Parker. He collaborated on the calculations with Patricia Lawston, a postdoc in geoscience at the University of Maryland in Greenbelt.

At the University of California, Berkeley, physics PhD student Vetri Velan estimates that Berkeley students would pay 30–60% more in taxes; those at the Massachusetts Institute of Technology in Cambridge could pay 240% more. Velan worked with Kathy Shield, a Berkeley nuclear-engineering graduate student, to create an online tool for students to calculate how the tax would affect them.

Most universities have stayed quiet on how they will cope if the tuition tax becomes law. Wary of stoking premature hope or concern, Campbell, too, would not comment on Brown University’s plans. But he did note that small, public institutions — including ones that historically educated black students — may be least able to absorb costs for students. “This tax could really threaten the existence of graduate education at minority-serving institutions,” Campbell says.

“We are cautiously optimistic,” says Jessica Sebeok, the AAU’s associate vice-president and counsel for policy. She says that the Senate has shown little appetite for the tax, and that there are signs of renewed debate in the House. “They’ve gotten enough concerned contact from their constituents to possibly rethink it.”