Current tax law does not consider waived tuition fees for graduate students as taxable income, and along with a modest yearly stipend from universities, this allows individuals pursuing doctorate degrees the financial ability to get by as they work. But this would change under the Republican tax bill currently working its way through Congress.
The new law would consider waived university tuition taxable income, so a student earning $20,000 a year teaching courses and receiving a $20,000 tuition waiver would end up paying taxes as though they earned $40,000 that year.
None of the students we spoke to were optimistic about the plan. And neither are economists, who say the increased taxes would discourage Americans from seeking advanced degrees at a time when the country badly needs a better-educated workforce.
Katie Brown, a Ph.D. student at the University of Maryland, sees the move as restricting graduate school to the wealthy.
Brown said the bill would have long-term consequences. "Only rich people would be able to receive a graduate degree," she said. "When you limit the people that can create knowledge, what you get is bad knowledge. The potential devastation from this is immense."
NPR notes that about 145,000 students received tuition waivers in 2011-2012.
"Dollar for dollar, this might be the most misguided part of the plan," Kim Rueben, a senior fellow in the Urban-Brookings Tax Policy Center, told NPR earlier this month. "What you're doing is increasing the cost of going to graduate school ... and ignoring the fact that the government makes much more money if people have more education," she said.