Graduate Stipend Taxation

Anita Vasavada anitav at
Fri Jul 4 15:49:20 EST 1997

I'm forwarding some e-mails I received from graduate student
organizations.  It's really important that others besides graduate
students get involved and let their representatives know how they feel
about these tax laws.

Anita Vasavada
Graduate Student
Biomedical Engineering
Northwestern University


Dear Fellow Graduate Students:

The following is an update about the possibility of a large
increase in taxes on graduate students.  This proposed
increase would make taxable as income to the student tuition
paid by universities, foundations, and employers for RAs,
TAs, fellowship recipients, and employees.

If this is not of interest to you, please delete it.

If this is relevant to you, please read this carefully, even
if you have already heard about this issue.  We apologize for
the length, but feel this is an important matter.  The bill
has advanced in Congress since our first email.

To save you time the following is an outline of this email:

1. Background information and update.
2. What you can do.
3. How to contact your Senators and Representatives.
4. Possible talking points.

***Please feel free to forward this Email to your fellow
   graduate students and faculty at other US universities as well as
   to family and friends who will be supportive, and under-
   graduates who may be considering graduate school in the
   future.  If you help spread the word it may help keep
   your taxes down.  It is important that news of these changes be
   heard across the country by every graduate student.  Most graduate
   students are still unaware of these proposed tax increases.***

>From the graduate student representative organizations at:
        Johns Hopkins School of Medicine
        Stanford University
        Harvard University
        Massachusetts Institute of Technology


As you may know, the "Tax Relief Act" of 1997, passed the U.S.  House
of Representatives (H.R. 2014) on Thursday, June 26.  A different
version of the bill passed the Senate (S. 949) on Friday, June 27.
The House bill, while providing $135 billion in tax relief to many
Americans, contains a provision which drastically and detrimentally
affects graduate students.  A short clause phases out section 117(d)
of the tax code, the section that excludes the value of tuition
waivers or tuition reductions from taxable income.  With the loss of
this tuition tax exclusion, many graduate students will see their
taxes raised by thousands of dollars per year.  Examples provided by
the NAGPS (National Association of Graduate-Professional Students)
indicate that some of us may see our after-tax wages cut by 50% or
even more!!

Tuition waivers are used in many graduate programs to assist students
during their often-lengthy education.  Most of these students are
obtaining PhDs in academic fields and will go on to modestly-paying
university positions, possibly after long post-doctoral research.
They serve as teaching assistants or research assistants in return for
not paying tuition, which can easily exceed $20,000 per year at
private institutions.  Under the House version of the bill, the value
of this tuition waiver would be considered taxable income.

Although the House version of this bill is a disaster for graduate
students, the Senate version does not include the repeal of section
117(d) of the tax code.  Because of this and many other differences in
the House and Senate versions of the bill, both houses of Congress (as
well as the White House) will convene to reconcile the two versions of
the bill following the July 4th recess.  At that point, the bill will
be voted on for final passage, and signed into law.  Our last chance
to defeat the House bill is through this House-Senate Committee, which
is expected to begin meeting the week of July 7th.

If you have not heard of this issue, contained within the highly
publicized "Tax Relief Act," it is because this act is enormous,
containing tax issues involving cigarettes, capital gains, and the
$500 per child tax credit, to name just a few.  It is these other
issues which have gained the media's attention, and few people seem to
be aware of the impending disaster for graduate students, higher
education, and university and research budgets.  **It is our
responsibility to ensure that our opinions are voiced and that this
issue gains national attention.**

For more background on this situation, see one of the following web

National Association of Graduate and Professional Students (NAGPS):



Harvard GSC:


What you can do:

1.  Please forward this Email to all graduate students you know
        at other institutions, as well as your family, your
        friends, and any undergraduates you know who plan to go
        to graduate school in the future.  (Maybe media also!)
        Convince them to take action.

2.  Distribute this information to fellow students, faculty,
        department and graduate program directors, and
        administrators within your own institution.  Organize a
        campus-wide response through your local graduate student
        representative group.  Be sure that your administration
        is on top of this issue and is taking immediate action.

3.  Call (or fax or email) your Senators and Representative!
        It is critical that your voice be heard by your own members
        of Congress.  Sheer numbers of calls will make an impact.

4.  Make a special effort to swamp the members of the Conference
        Committee with calls, as they will make the ultimate
        decision in reconciling the bills.  If you are
        represented by one of these Senators or know someone who
        is (DE/MS/NY/NM/IA/OK/NJ/ND), make sure contact is made!


How to contact your local Senators and Representatives:

House/Senate switchboard:  800-962-3524 or 800-972-3524
       or House: 202-225-3121      Senate: 202-224-3121

Or check <> for addresses, direct phone
number, district office number, email and more information.

When writing to members of Congress, the correct address
style is:

The Honorable __________                The Honorable __________
United States House of Representatives  United States Senate
Washington, D.C.  20515                 Washington, D.C.  20510

Dear Representative __________:         Dear Senator __________:

The following senators are members of the Conference Committee which
will be composing the final version of the bill.  These are critical
people to target, especially if you live or go to school in DE, MS,
NY, NM, IA, OK, NJ or ND:

        Roth (R-DE), Lott (R-MS), Moynihan (D-NY),
        Domenici (R-NM), Grassley (R-IA), Nickles (R-OK),
        Lautenberg (D-NJ), Conrad (D-ND)

                Senate Conference Committee Members
                DC Phone Numbers are in Area Code (202)

State   Member               DC Tel.  DC FAX   District Tel.  E-Mail
 DE    Sen. W Roth, Jr. (R)  224-2441 228-0354 302-573-6291 N/A
 NM    Sen. Pete Domenici (R)224-6621 224-7371 505-988-6511
senator_domenici at
 IA    Sen. Cs Grassley (R)  224-3744 224-6020 319-363-6832
chuck_grassley at
 OK    Sen. D Nickles (R)    224-5754 224-6008 405-231-4941
senator at
 MS    Sen. T Lott (R)       224-6253 224-4639 601-965-4644
senatorlott at
 NY    Sen. D.P. Moynihan (D)224-4451 228-0406 212-661-5150
senator at
 NJ    Sen. Frank Lautenberg(D)224-4744 224-9707 609-983-4143
frank_lautenberg at
 ND    Sen. K Conrad (D)       224-2043 224-7776 701-232-8030
senator at

If you want to hit them all with email, here is an easy block of email

senator at,senator at,senatorlott,chuck_grassley at,senator_d
omenici at,frank_lautenberg at lautenberg.senat,senator at

House Conference Committee members will not be announced until July
7th or 8th.

Congress is now on Independence Day recess (through July 7th) and most
members will be in their home districts.  Use this opportunity to meet
with them personally to discuss your concerns.


What you can say in your calls and letters:

Please be polite and courteous, but let them know if you oppose the
loss of section 117(d), the tuition tax waiver for graduate students.
This waiver is retained in the Senate version (S.  949) of the Tax
Relief Act but eliminated in the House version (H.R. 2014).  Be sure
to mention that you are concerned that this issue be carefully
considered at the meeting of the Joint House- Senate Conference
Committee to reconcile the two versions of the Tax Relief Act.
Explain to them your concerns for higher education and for research
should the tuition tax waiver be lost.

Here are some specific points you can mention:

- how this tax increase will impact your financial status
     (have numbers to illustrate your point)
- how top students may opt not to pursue graduate degrees,
    threatening America's continued leadership in research
- how graduate students will leave graduate school
- how losing qualified students in your field will impact the US
     (e.g., biology: cancer and HIV/AIDS research
            engineering/physics:  national defense)
- how this tax will increase costs to universities, leading to
     an increase in undergraduate tuition
- for more specifics, see NAGPS Talking Points:


WRITE, PHONE, and FAX these issues to your representatives
immediately.  The more they are aware that there is real and dire
concern over this issue, the more likely that these changes will be
removed in the House-Senate Conference Committee.


Thanks for your action!

The Johns Hopkins University School of Medicine
Graduate Student Association
gsa-g at

Stanford University
Graduate Student Council
gsc at

Harvard University Graduate School of Arts & Sciences
Graduate School Council
gsc at

Massachusetts Institute of Technology
Graduate Student Council

In article <33BC0867.41C6 at>, pjschlax at JHUVMS.HCF.JHU.EDU
("Dr. Paula J. Schlax") wrote:

> Congress seems intent on making graduate school a little more difficult
> for a lot of students? According to a memo here, (I haven't paid as much
> attention as I should have) tuition may start to be taxed- since a lot
> of students have tuition waived, this could be a huge change in their
> taxable incomes and their net take home pay. 
> Does anyone have more info on this- has it been voted on, who's
> sponsoring the legislation etc? It seems like graduate stipends would
> need to increase significantly to counteract this- and for a lot of PIs,
> postdocs would end up being cheaper than grad students. Any opinions?
> (Don't flame me- I know I'm not informed!)
> Paula Schlax
> JHU Postdoc

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