The University of Wyoming is lobbying against a provision in the Republican tax plan now moving through Congress — which could make earning advanced degrees pricier for the students who seek them.
The tax plan passed by the House of Representatives on Nov. 16 would reclassify tuition waivers — which are currently exempt from taxes — as taxable income.
The latest version of the Senate’s tax plan does not include this provision, but could grow to include it as the two legislative bodies negotiate on one bill to send to the White House.
Uncertainty around the bill’s final contents — and the ramifications of the tuition waiver provision — has UW worried.
“I think it is very common for graduate students at the University of Wyoming to receive these waivers (and) has been for many decades,” said Chris Boswell, vice president for governmental and community affairs. “And so, the bill as it currently stands is very definitely a concern to the university and to graduate students and to programs which rely on graduate students.”
Many graduates across the university receive a tuition waiver upon being accepted into a master’s or Ph.D program, or once they are approved to be a teaching assistant. The university covers the roughly $4,500 in tuition and more than $1,300 in student fees graduate students would otherwise pay each year as they complete their coursework.
While the House’s tax plan treats this waiver as taxable income, graduate students like Jordan Giese never actually see this money. He sees only the stipend he is paid as a graduate assistant for a couple of 4000-level courses.
“The university gives me a modest stipend to live on and that pays my rent and it pays my bills and that just about takes care of it,” said Giese, who is working on a master’s in public administration. “I don’t live extravagantly. I live, I would say, decently modestly.”
Because he never actually sees the roughly $5,800 waived by UW, Giese said he would have to pay these new taxes out of his stipend and out of the income he makes from a second job.
“This adds another facet to it that we (graduate students) didn’t anticipate,” he said. “We may be making half of what we thought we (would) to go on and do research for universities. And again, the university is very gracious with the stipend, but it’s modest to live off of.”
Continuing work on his master’s degree would be difficult enough with the added tax burden, Giese said, but taxing tuition waivers could kill his hopes for pursuing a Ph.D.
“It’s been a lot of considerations in the last two weeks that I did not think I’d be having,” he said. “People already go into a considerable amount of debt to go into school to begin with. And if we’re going to start taking away tuition waivers for people to pursue higher and higher degrees, those are only going to be harder and harder to achieve and harder and harder to pursue.”
Kurtis Butler is at that critical point of deciding whether to pursue a Ph.D, having finished the coursework for a master’s in geography and nearly completed his thesis.
“I’m a first-generation college student, so my family doesn’t exactly have the money to keep sending me to graduate school or anything,” Butler said. “And for my master’s, I relied solely on that tuition waiver and stipend … The only way I can do a Ph.D program is if I get a tuition waiver and stipend.”
The House of Representatives passed the Tax Cuts and Jobs Act with support from Rep. Liz Cheney, R-WY. The Senate’s version of the bill — which does not currently include the provision reclassifying tuition waivers — was approved Tuesday by the Senate Budget Committee, which is chaired by Sen. Mike Enzi, R-WY.
UW administrators said they are worried about what the tax bill could mean for advanced degree-seekers in Laramie.
“The proposed tax plan would, in the form passed by the House, tax tuition and fee waivers making graduate education, in particular, much more expensive,” said Jim Ahern, associate vice provost for graduate education. “This will negatively impact our current students and will likely also decrease the number of people who would consider applying for our graduate programs.”
Boswell said the university is working with Wyoming’s Congressional Delegation — as well as a lobbying firm employed by UW and other institutions — to express its strong disapproval of the provision.
“We team with other universities and other associations to make sure that the message isn’t simply about the University of Wyoming — although we are focused on that,” he said. “But we want members of Congress to know that this has an impact that is very broad across many, many institutions of higher education.”
It’s unclear what the final bill will look like, Boswell said.
“Ultimately, the differences between the House and the Senate will have to be reconciled,” he said. “And I think it’s very difficult to know what is likely to be in a bill that might reach the president’s desk. There’s a lot of lobbying going on on behalf of many interests, and higher education is just one of those interests.”
Boswell added UW is hoping for the best in the face of uncertainty.
“This is such a fluid situation,” he said. “It’s not as though individual universities can track moment by moment negotiations on federal bills of the complexity that you see with the possible tax bill. We very much rely on the professionals that we employ to pursue this legislation and keep track of what is in and what is out and to represent the university’s interests.”
Meanwhile, students are waiting for the latest news from Washington, D.C., knowing the decisions made in the nation’s capitol will impact their futures directly .
“Right now, the plan is to work a little bit and see what happens, but I can’t do a Ph.D program without some cushion money saved up or a tuition waiver that isn’t taxed,” Butler said. “When you start charging taxes on a tuition waiver — on students who are barely making it by on their stipends in the first place — then I think that’s just dangerous in general.”