The Tax Cuts and Jobs Act under consideration in Congress negatively impacts higher education at all levels, with graduate students among those who will be most adversely affected.
Graduate students are the blue-collar workers in university research efforts that affect local, national and global economies, and they make a difference during periods of great transition in the world. As the next generation of college faculty and working professionals, graduate students work tirelessly to obtain the advanced knowledge and professionalism to contribute and succeed.
At Maine’s land grant university, the scientific research, scholarship and creative achievements of graduate students help advance the state, affect potential policy change for the well-being of the public, and contribute to quality of life.
The University of Maine in Orono is the center for research and graduate studies in the state. It is home to nearly 2,000 graduate students. They move the UMaine research efforts forward, mentor undergraduate and high school students, take on leadership roles and influence our society in profound ways.
But the Tax Cuts and Jobs Act, if passed and enacted, specifically as it applies to graduate students, will negatively impact all graduate students and the disciplines that depend on their hard work and dedication.
The House version of the bill, passed last month, makes changes to the U.S. tax code that will have profound effects on students’ ability to pursue higher education at all levels, but especially graduate studies. The bill alters the American Opportunity Tax Credit, eliminates the Lifetime Learning Credit for part-time students, graduate students and nontraditional students, who take more than five years to graduate, and eliminates a tax benefit for graduate students, significantly increasing the price to further their education and professional development.
Many graduate students who earn small stipends of $20,000 or less per year for helping to teach or assist faculty members with research receive a tuition waiver. Tuition can vary from around $8,000 a year for Maine residents to $25,000 for nonresidents. Under this new legislation, the tuition now generously covered by a waiver would count as taxable income, dramatically increasing students’ tax burden.
This could nearly double the taxable income of a graduate student who barely makes ends meet now. Many of these students are struggling to pay off expenses from their undergraduate programs while juggling family expenses, such as raising a family and supporting aging parents.
The Senate’s version of the bill, passed earlier this month, left out many of these negative changes, but now lawmakers must reconcile differences between these these two bills.
Although the stated purpose of the Tax Cuts and Jobs Act is to boost the economy, it could accomplish just the opposite: turning students away from advanced graduate training; preventing talented individuals from highly diverse backgrounds and all walks of life from calling UMaine home; and severely impacting research and development, the creation of a skilled workforce and other factors that contribute to a vibrant economy.
UMaine is Maine’s public research and graduate university, and we ask that you advocate in keeping our relationship with the community strong. UMaine’s ability to continue education, research and outreach in critical fields is dependent on access to graduate studies.
Graduate students are the fuel for the engine that drives university-based research, leading to new discoveries, innovation and economic development. We need to ensure that the engine remains strong by preserving the opportunities afforded by the Hope Scholarship, American Opportunity Tax Credit and other provisions in our tax code.
The potential economic and educational consequences of the tax bill are just too great and have far-reaching implications for Maine’s and the nation’s future.
Camerin Seigars is a graduate student studying mechanical engineering at the University of Maine in Orono. Walter McCulley III is a graduate student studying psychology at UMaine. Both are senators in the UMaine Graduate Student Government.
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