MSU grad students plan protest over tax bill

by Bozeman Daily Chronicle, Gail Schontzler

Graduate students at Montana State University are planning to join a national “walk out” on Wednesday to protest a tax reform bill in Congress that would require them to pay income tax on their tuition waivers.

“We make a pretty meager salary,” Will Wright, 28, a doctoral student in history at MSU, said Monday. “For a lot of us, myself included, if the House version passes, it’s going to be a tremendous financial burden, and it may mean I exit graduate education.”

The Tax Cuts & Jobs Act passed Nov. 16 by the Republican-controlled House aims to boost the economy by giving more than $1 trillion in tax breaks, particularly to corporations and businesses. The GOP and Democrats are disputing whether the bill would mean tax breaks or tax hikes for middle-income households.

Often overlooked in the larger debate is one provision that would tax the tuition waivers that graduate students receive in return for working long hours as classroom teachers and laboratory assistants.

“This is money we never see,” Wright said. “What irks me the most is – I’ve read a lot of analyses from the Congressional Budget Office – millionaires and billionaires would get a tax break and me, who makes $15,000, would get a tax hike. It seems unfair.”

As a graduate student from Idaho, Wright receives a $15,000 stipend from MSU, in addition to an out-of-state tuition waiver worth about $16,000 a year, according to MSU’s website. If the tuition waiver were counted as income, that could more than double his taxable income.

MSU grad students plan to hold an informational and letter-writing meeting Tuesday, from 3:30 to 5:50 p.m., in the Malone Conference Room of Wilson Hall.

At 11:30 a.m. Wednesday, they plan to walk out of their classrooms, seminars and labs to deliver their letters to the downtown office of Sen. Steve Daines, R-Montana.

The version of the tax reform bill that passed the Senate Finance Committee doesn’t call for taxing graduate tuition waivers. The Senate bill is expected to come up for a vote soon, possibly this week.

If the two chambers pass different bills, they would go to a conference committee for reconciliation before going to President Donald Trump’s desk for his signature.

Sen. Daines’ office wasn’t able to provide a comment on the senator’s position by press time.

The office of Sen. Jon Tester issued a statement from the Montana Democrat, saying that, “Taxing education benefits to pay for tax cuts for wealthy out-of-staters is one of the swampiest schemes I’ve ever heard. We need to go back to the drawing board and find a bipartisan, fiscally responsible tax plan that doesn’t add to our debt or make it harder for folks looking to get an education.”

According to the Chronicle of Higher education, 145,000 graduate students – 60 percent in science and technology fields – attend American colleges for free, while living on minimum-wage stipends, working long hours and taking classes.

Another 27,000 undergraduates receive tuition waivers, often for working in dormitories as resident assistants, it reported.

The Montana University System’s budget shows it planned to give tuition waivers to the full-time equivalent of 619 graduate teaching and research assistants this year. For every one full-time graduate student teaching or doing research, the state system has roughly four contract faculty members.

The national walkout on Wednesday is intended, Wright said, “to demonstrate what the campus would be like in our absence.”

If graduate students couldn’t afford to stay in school, he said, the cost of educating undergraduates would rise, because grad students teach many undergraduate classes at a much cheaper cost than tenurable professors.

Grad students in science and technology fields are “the next generation of innovators,” Wright said. They do laboratory research on things like cancer, he added. “The tax plan would directly affect that research.”

One reason MSU grad students want to bring their letters to Daines is that, as a Republican, he may hold more sway on the outcome, Wright said. And Daines has been vocal in his support of science and technology, so “we feel he would be receptive to our message.”

The House bill would also tax tuition waivers given as a benefit to university employees. Wright said he had a classmate at Carroll College whose dad worked as a janitor there for 20 years, and the tuition waiver for his kids was one of the big reasons he kept the job. Losing that benefit would be worrisome for a lot of people, he said.

The House bill would also end the interest deduction for 12 million individuals paying off student loan debts. It would affect colleges’ fundraising foundations by shrinking the number of people who could itemize charitable deductions, and impose a 1.4 percent tax on endowments’ investment earnings.

Kevin McRae, deputy commissioner of higher education, said the Montana University System hasn’t yet taken a position on the tax reform bills before Congress. The commissioner’s office in Helena is monitoring the tax plan and trying to learn more from its campuses and the national college associations to which MUS belongs, he said.

“Education affordability is a paramount concern in the Montana University System,” McRae wrote in a statement. “Therefore, we will be sharing our concerns with members of Montana’s congressional delegation.”

One group MUS is affiliated with, the American Council on Education, representing 1,800 college and university presidents, estimated the House bill would reduce tax benefits for college students by $65 billion over a decade.

Tax-free tuition waivers, argued ACE’s lobbyist, “ensure the best and brightest in the country can afford an education. Congress is sending a clear message that they’d rather use that money for corporate tax breaks.”