A grad student tax could lock out many from advanced degrees

Those planning to apply to Ph.D. programs for the 2018-2019 academic year should be especially disappointed in the tax-reform bill that the House of Representatives recently passed.

One particularly onerous portion of the bill is the so-called “grad student tax.” The way it works is if a student receives tuition valued at $50,000 and a $25,000 doctoral stipend for teaching classes and research labor, the student would be taxed at $75,000. Under this new bill, the value of the tuition is counted as income, even though students will never see that money.

For some aspiring scholars, the new tax code will mean that it’s not worth applying or accepting admission into a doctoral program. For others, it means they must withdraw from the institution because they can’t afford more student loans to cover the impending tax bill.

If Congress decides to not remove the stipulation for the grad student tax, it will have the most deleterious effect on blacks and Hispanics. As a black male who grew up on the South Side of Chicago, the prospects of me completing a four-year degree were not good. This was true even though I had a parent who was college educated and grew up in the same neighborhood as the University of Chicago (and a few blocks from Barack Obama’s house).

That same university, along with the Consortium on Chicago Schools Research, produced findings in 2006 that only 4 percent of black males graduating from Chicago Public Schools would finish a four-year degree within 10 years. I was part of that fortunate 4 percent, graduating from college in 2006.

I went on to complete a dual-masters’ program, but had I faced the possibility of more student loan debt to reach that goal, the financial obstacle would not have been a glass ceiling but a looming and impenetrable wall.

Given the known wealth gap in this country, and the systemic ways that black and Hispanic families are denied free passage down paths that lead toward economic stability, the children of these families don’t have trust funds waiting on them after graduation to ease the student loan burden. Rather, many will be met with expectations to provide supplemental income to retired parents on fixed incomes. This becomes a Sisyphean task to aid aging parents while saddled with student loan debt.

The insidious nature of this new tax code is that as colleges and universities try to increase faculty diversity, this will be one more roadblock to seeing more black and Hispanics employed in tenure-track positions. If Ph.D. graduate programs aren’t successfully able to recruit top black and Hispanic students because of the “grad student tax,” then in the next five to seven years, the pool of applicants for tenure-track positions won’t be all that diverse. This means that universities and colleges won’t be able to employ faculty members who reflect the diversity among the student body.

While the Senate’s current tax bill does not include this provision, for ultimate passage through both houses of Congress, it might make it into the final bill. If it is included and passed, the only sufficient rebuttal to this draconian new rule would be for colleges and universities to fully remit their tuition to Ph.D students. Not just as a tuition waiver, but to nullify it absolutely. Anything less than that is to entice students with hopes of a flourishing academic career at the cost of even more student loan debt.

The National Center for Education Statistics estimates that 183,000 people will graduate with a Ph.D. in the 2017-18 academic year. While this number seems small, these graduates will be part of the lifeblood of universities and colleges nationwide as they provide the knowledge base with which to educate future generations. It is incumbent upon these same universities and colleges to protect their most valuable assets at all costs.

The Rev. Joshua Lazard is the C. Eric Lincoln Minister for Student Engagement at Duke University Chapel.

This story was originally published December 6, 2017 at 10:19 AM with the headline "A grad student tax could lock out many from advanced degrees."