Saturday, December 2, 2017

Update on the Senate tax bill/tuition waivers

The Senate early Saturday morning narrowly approved major tax legislation roundly opposed by higher education leaders and student groups... 
The 51-to-49 Senate vote sets up negotiations with House leaders over substantial differences between the two bills. Most in higher education view that House bill as substantially more harmful for students and colleges than the Senate bill, but that doesn't mean they don't have major concerns over the Senate legislation. 
...But the Senate plan does not include provisions stripping many tax benefits for students pursuing a college or graduate degree or paying off their loans, making it a significant improvement over the House bill, said Ted Mitchell, president of the American Council on Education, in a statement. Student and faculty groups mobilized protests across the country this week against the elimination of those student tax benefits. Those protests focused in particular on a provision of the House bill that would tax graduate student tuition waivers as income -- a change that those groups say would make graduate education unattainable for many students....
I suspect the tuition waiver will go away, but my assessment of my ability to predict political outcomes has taken a dive as of late...

UPDATE: Derek Lowe has some good advice on calling your elected representatives.

From ACS' lobbying effort Act4Chemistry:

  • The House voted and passed H.R. 1, the Tax Cuts and Jobs Act - the bill does not preserve the graduate education tax waiver
  • The Senate voted and passed H.R. 1 - the bill preserves the graduate education tax waiver
  • Representative Kevin Brady (R-TX-08) stated there may be flexibility on the House's elimination of the graduate education tax waiver
  • Congress will now work to reconcile the different versions of the House and Senate tax bill.


  1. Well, congress considers things like CHIP too expensive while adding tax breaks for private jet owners, it's not like they'd have any qualms about taking money from students. But we will see.

    1. I don't think the private jet thing is real without further evidence (I have not read, but one of the people at church who generally knows what he's talking about noted the provision and said that it was a clarification on previous rules for assessing airport fees to people flying private jets versus public carriers - private jets are supposed to pay a fuel surcharge, and passengers on public carriers pay ticket fees, and that the rule codified that status). Other than that, I don't think Congress cares about anything other than that the people who put in office there and keep them there get what they paid for. It doesn't seem like they've been great at long-term thinking (otherwise, they'd have had a decent tax plan and Obamacare alternative before they started the circus).

      Some of the stuff (the AMT kill and the removal of deductions for local and state taxes and change in mortgages) were recommended awhile ago as a deal to dump the AMT. The corporate tax cut (without a clear idea of what gets cut to pay for it) seems like a transfer of taxes from businesses to individuals, which seems unfair to me. Maybe everyone should just incorporate - if you have the powers of a citizen and not the responsibilities, that seems like a recipe for disaster.

      Why the rush? The tax costs and benefits aren't going to really hit until after the election for most voters, though maybe the corporate ones will, so that the Republicans can make big splashy ads if Pfizer and other companies bring back their overseas money to the US, and take credit for any resultant economic boost, while the costs (when all those people fall off insurance, someone's going to pay when they get sick) are quieter.

      I wish unbounded cynicism as a mental stance would stop paying dividends.

    2. And I need to think more before I type (though the comment about no long-term thought fits). I think they want to screw their enemies as a secondary point of the bill (to justify their votes and money) and the long-term consequences don't matter. If you have to lie about a policy to get it done, the stated purpose for the policy can't matter much (because the reality in which that policy would make sense is not the one that exists, else you wouldn't have to lie) or you're just not very smart, or are self-destructive. I don't know at this point what fits.

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  3. I don't understand why this is a big deal. The "tuition" and "tuition waiver" are accounting gimmicks that only exist in theory.

    1. It's a big deal because the worst case scenario (nothing changes, the universities do not adjust) hits the youngest, poorest people in the mix.

      I agree that the tuition waiver concept is mostly bull, i.e. it's really an additional overhead subsidy to the universities out of grants from the government to the universities. But that's not how this is working (i.e. the two titans that I don't really care much about (universities versus the NIH (Godzilla versus Mothra!)) fighting over the overhead pie.) Rather, it's hitting the poorest people (which is part of the hostage-taking that is a stupidly large part of how legislative negotiation works these days.

    2. At the private R1 university where I work, the tuition paid for grad student RA's is around $16k, or 1/3 of the official tuition rate. I suspect other schools have similar arrangements. This keeps it so it costs around the same amount to have a grad student vs a postdoc. If the tax change makes it into law, I assume universities would change their overhead structure and/or rename the tuition waiver something else. However, I'm cynical enough that I wouldn't be surprised if the students get charged tax on the full amount rather than the cheaper rate paid for out of grants.

    3. The other thing to remember is that this will heavily hit public vs. private schools disproportionately.

      Private schools will much more easily be able to either adjust graduate tuition or change from tuition waivers to tuition scholarships (some already have).

      Public R1s, on the other hand, have very little control over this directly- it's the state board of education/trustees that control tuition and policies.


looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20