On taxes, tuition and the shutting down of the education elevator
So in their endless quest to take more and more money from relatively less well off people and give it to corporations and the wealthy, the Republican tax plan passed by the House of Representatives makes tuition waivers granted to students a taxable benefit.
This sounds pretty dry, I know. In fact, it’s the dryness that makes it easy to support: since no one knows what this means, who cares?
What it means, though, is this: it makes lots of higher education – especially graduate education – almost completely unaffordable for most people.
To take an example I know well, let’s talk about me. I grew up in a perfectly fine, perfectly ordinary middle class family in a ranch house in a suburban environment inside the city limits of Charlotte, NC. My still married parents were both college educated; my father supported the family; my mother stayed at home until I was 16 when she got her Master’s degree and began a 20 year career as a public school librarian. We had a dog: the biggest dachshund you’ve ever seen, Baron. I have a sister. If you wanted a picture of the middle of the middle class at that time, you could have just photographed my family.
Moreover, because my parents deeply valued higher education, AND because states used to actually support higher education at significant rates, my parents were able to promise both my sister and me that they would pay for our college educations through our undergraduate degrees. Which they duly did. (Note that tuition at my school, Appalachian State University, ran about $2000 a year at this time (the early/mid 1980s), and I got a scholarship for half of that.) I graduated in 4 years completely debt free.
But as well off as my parents were, they made it clear that if I or my sister wanted to go to graduate school, that was on us. They got us to adulthood; after that, our path was ours to walk. Which, given the opportunities and experiences and support they had accorded me to that point, seemed perfectly fair to me.
So when I decided I did want to go to graduate school (a decision I made sometime in my junior year of college), I began applying to various schools, eventually settling on Vanderbilt for both its reputation and the amount of support it was offering. See, lots of graduate programs end up supporting their students in at least two ways: they pay salary as a TA, and they waive their tuition for graduate students.
As a practical matter, I only cared about the salary, since that is what I had to live on: $6300 my first year, rising to $8100 my last. But now that I am professional academic, I know that for universities, the tuition waiver is the bigger deal: it’s the one that costs the most money. Even in the late 1980s, for example, Vanderbilt’s tuition was nearing $40,000 a year. (God knows what it is now.) Thus, by waiving tuition, Vanderbilt was forgoing tens of thousands of dollars of income for every graduate student it had.
But, of course, the reason Vanderbilt waived that tuition was that they knew that absent the waiver, I wouldn’t have gone to Vanderbilt for graduate school. Neither would almost anyone. After all, as well off as my family was when I was growing up, we were nowhere near well off enough to look at paying for a Vanderbilt education. (Remember, my undergraduate tuition was around $2,000/year, or very nearly 20 times less expensive than Vanderbilt.) The tuition waiver made an elite education accessible for me and lots of other people.
And now the Republicans want to tax that waiver as income even though no student ever holds the money. I was not given $40,000 to then give back to Vanderbilt; my bill just listed $0 for tuition. The money was accounted for well outside my checkbook.
The effect of this is easy to explain. When I was in graduate school, I paid income taxes on my salary. They were low, since I didn’t make much money, but of course I paid sales taxes and property taxes and automobile taxes and all such other taxes out of the remainder – just like everyone else does. Accordingly, I lived plainly but comfortably: lots of ramen noodles those years, but I was never hungry or truly broke. And, in a great miracle of life, I walked out of graduate school basically debt free – I did owe my parents some money when my 1982 Chevy Citation needed lots of repairs. But otherwise, I began my academic journey from a clean slate. (And I paid my parents back quickly.)
Under the Republican plan today, though, I’d have had to pay income taxes on something like $45,000 in my first year of graduate school … despite my actual income of $6300. Which, of course, I couldn’t have done. So I wouldn’t have gone to graduate school. Nor, I imagine, would anyone who wasn’t already wealthy or comfortable taking on vast debt in order to get an academic job. Which in lots of programs would be financial suicide.
Why are the Republicans doing this? I’ll give them the benefit of one doubt: I don’t think they are deliberately trying to stop people from going to graduate school. (Even if that will surely happen.) I really think their only concern is to eliminate deductions that help less well off people so they can give tax cuts to the rich. Giving money to rich people in the form of tax breaks is the raison d’être of the Republican Party, after all.
But it’s sad. It’s short-sighted. And it’s another way America is killing itself by following ideological madness to its suicidal conclusion.